FPIs Continue To Dump Indian Equities In March, Check What Led To The Outflow

The investors infused Rs 2,405 crore in the debt general limit and pulled out Rs 377 crore from the debt voluntary retention route during the same period.

This outflow from equities followed the investors withdrawing Rs 34,574 crore from equities in February and Rs 78,027 crore in January. 

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Foreign portfolio investors (FPIs) continued to act bearish and withdraw funds from the Indian equity market in the first week of March. Official depository data revealed that the investors dumped Indian equities worth Rs 24,753 crore, as of March 7 this month, amidst surging global trade tensions and weak corporate earnings.

Meanwhile, the investors infused Rs 2,405 crore in the debt general limit and pulled out Rs 377 crore from the debt voluntary retention route during the same period, reported PTI. This outflow from equities followed the investors withdrawing Rs 34,574 crore from equities in February and Rs 78,027 crore in January. 

Global Trade Tensions Impacted Confidence

The overall outflow by FPIs hit Rs 1.37 lakh crore in 2025 so far, the data showed. Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment, noted, “The sustained selling by overseas investors is chiefly due to a combination of global and domestic factors. A major catalyst continues to be the escalation in global trade tensions, which significantly weigh on investor sentiment. Imposition of higher tariffs by the US on countries like Mexico, Canada and China, along with reciprocal tariffs on several countries, including India, has dented market sentiments.”

This also represents the 13th straight week of net outflows. Since December 13, 2024, FPIs have dumped equity shares worth $17.1 billion.

Muted Earnings Season

Srivastava noted that weak corporate earnings resulted in adding on to the negative sentiment as they failed to meet investor expectations. As such, FPIs acted with caution towards the domestic equities. 

Vaibhav Porwal, Co-founder, Dezerv, stated that the rupee depreciation has resulted in eroding returns for the investors. In 2023, investors infused Rs 1.71 lakh crore, backed by optimism over the country’s strong economic fundamentals. Meanwhile, in 2022, investors withdrew Rs 1.21 lakh crore as global central banks implemented aggressive rate hikes across the world.