FPIs Dump Worth Rs 31,575 Crore In April So Far As US-China Trade War Intensifies, Here's What Experts Have To Say

The sharp reversal in sentiment is being attributed to global uncertainty sparked by sweeping tariffs imposed by the United States on a range of countries, including India.

The renewed selling pressure in April has taken the total FPI outflow for calendar year 2025 to Rs 1.48 lakh crore, underlining persistent investor unease.

Source : Pixabay

Foreign portfolio investors (FPIs) have turned net sellers in April, withdrawing Rs 31,575 crore from Indian equities between April 1 and April 11, reversing the brief buying streak seen at the end of March. 

The sharp reversal in sentiment is being attributed to global uncertainty sparked by sweeping tariffs imposed by the United States on a range of countries, including India.

This outflow follows a period of net investment during March 21–28, when FPIs infused Rs 30,927 crore into Indian equities. That short-lived inflow helped moderate the monthly sell-off, trimming the net outflow for March to Rs 3,973 crore, according to depository data, reported PTI.

However, the renewed selling pressure in April has taken the total FPI outflow for calendar year 2025 to Rs 1.48 lakh crore, underlining persistent investor unease.

Tariffs Trigger Fresh Market Volatility

The current wave of outflows comes amid heightened global tensions, largely driven by protectionist trade measures rolled out by the US government. “The turbulence in global stock markets following President Trump's reciprocal tariffs has been impacting FPI investments in India too,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

He noted that foreign investor strategies are still evolving in response to the shifting environment and added, “A clear pattern in FPI strategy will emerge only after the ongoing chaos dies down.” 

However, Vijayakumar remained optimistic about India’s medium-term outlook, suggesting that FPIs could return once global stability improves. “Even in an unfavourable global scenario, India can grow by 6 per cent in FY26. This, along with better earnings growth expected in FY26, can attract FPI investments into India once the dust in the market settles down,” he said.

Debt Markets Also See Withdrawals

The selling was not limited to equities. FPIs also pulled out Rs 4,077 crore from the debt general limit and exited Rs 6,633 crore from the debt voluntary retention route, further signalling risk aversion across asset classes.

Despite the outflows, some analysts remained confident in India’s long-term positioning. “The ongoing sell-off in Indian equities is driven by macro and geopolitical risk led by tariffs slapped by the US government. However, the country's strong macro fundamentals remain intact,” said Vinit Bolinjkar, Head of Research at Ventura. He added that robust domestic consumption and shifting global trade patterns continue to position India as an attractive destination in the years ahead.