Mumbai: Foreign Portfolio Investors (FPIs) continued their selling spree in the Indian stock market, pulling out Rs 12,257 crore (USD 1.4 billion) in just the first week of September. This sharp withdrawal followed net outflows of Rs 34,990 crore in August and Rs 17,700 crore in July. So far in 2025, FPIs have sold equities worth a massive Rs 1.43 lakh crore, according to depository data.
Why Are FPIs Selling?
Experts point to both global and domestic factors behind the recent exit. The main global triggers include a stronger US dollar, renewed tariff threats from the United States, and heightened geopolitical tensions in regions like Ukraine and the Middle East.
Domestically, concerns about slowing corporate earnings growth and India’s relatively high stock market valuations compared to other emerging markets prompted investors to book profits. Analysts said Indian equities are trading at a premium, making them less attractive when cheaper options exist elsewhere.
What Experts Are Saying
According to Himanshu Srivastava, Associate Director at Morningstar India, “Global uncertainties combined with weaker domestic earnings momentum pushed FPIs to trim exposure.” He added that India’s long-term growth story, policy reforms such as GST rationalisation, and expectations of earnings revival could bring FPIs back once global tensions ease.
Vaqarjaved Khan, Senior Analyst at Angel One, said that upcoming US Federal Reserve commentary, labour market data, and RBI’s stance on interest rates and rupee stability will be key factors influencing FPI flows in the coming weeks.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that strong domestic institutional investor (DII) buying allowed FPIs to sell at high valuations and redirect money to cheaper markets such as China, Hong Kong, and South Korea.
Debt Market Moves
In the same period, FPIs invested Rs 1,978 crore in the debt general category, while withdrawing Rs 993 crore from the voluntary retention route. This shows investors are still exploring selective opportunities beyond equities.
