FPIs Continue To Dump Indian Equities, Overall Outflow Crosses Rs 1 Lakh Crore In 2025

Official data revealed that FPIs dumped Indian equities worth Rs 23,710 crore in the month, while the investors pulled out Rs 7,352 crore from debt general limit and Rs 3,822 crore from debt VRR.

Foreign portfolio investors (FPIs) continued their bearish outlook towards Indian equities and withdrew more than Rs 23,710 crore from the segment in February so far. This has pushed the overall outflow from investors past Rs 1 lakh crore in 2025 as global trade tensions remain escalated.

Official depository data revealed that the FPIs dumped Indian equities worth Rs 23,710 crore in the month, till February 21. Meanwhile, the investors pulled out Rs 7,352 crore from the debt general limit and Rs 3,822 crore from the debt voluntary retention route, reported PTI. 

Elaborating on the outlook on sentiment, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, noted that a recovery in FPI investment in India will take place when economic growth and corporate earnings revive. “Indications of that are likely to happen in two to three months,” the expert said.

Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment Research India, explained that massive selling from the investors has resulted in the Nifty clocking negative returns of 4 per cent year-to-date. 

“Market concerns heightened following reports that US President Donald Trump was considering imposing new tariffs on steel and aluminum imports, along with reciprocal tariffs on several countries,” Srivastava added.

These developments have triggered fears of the possibility of a global trade war again, resulting in FPIs re-evaluating their exposure to emerging markets, such as India.

“On the domestic front, lackluster corporate earnings and persistent depreciation of the Indian rupee, which breached multi-year lows, further diminished the appeal of Indian assets,” Srivastava pointed out.

Vijayakumar said that the US market has become a lucrative market for huge capital inflows from across the world. However, China has also emerged as a major destination for FPIs. 

“The Chinese president's new initiatives with their leading businessmen have kindled hopes of a growth recovery in China. Since Chinese stocks continue to be cheap, this 'Sell India, Buy China' trade may continue. But this trade has happened in the past and experience is that it will fizzle out soon since there are structural problems constraining Chinese economic revival,” the analyst explained.