Foreign Portfolio Investor (FPI) Outflows Intensify

Foreign investors are stepping up their exit from Indian equities, reflecting heightened caution amid global macroeconomic risks and policy uncertainty. The trend has weighed on market sentiment and signals the need for domestic investors to brace for continued volatility. September Sees Fresh Outflows : In September alone, Foreign Portfolio Investors (FPIs) have pulled out nearly ₹7,945 crore from Indian equities. The selling has been broad-based, affecting key sectors including banking, IT, and large-cap consumer stocks. This withdrawal marks one of the sharper monthly outflows of the year. Year-to-Date Picture : For the year to date, net outflows have reached roughly ₹1.38 lakh crore, underscoring the scale of foreign selling pressure. Persistent withdrawals have kept Indian markets on edge, with foreign money turning from a key liquidity provider to a source of volatility. Drivers Behind the Exit : Global Macro Risks: Concerns over slowing global growth and elevated inflation are making risk assets less attractive. US Policy Shifts: Uncertainty surrounding US Federal Reserve interest rate moves and changing fiscal policy are pushing global funds toward safer havens. Trade & Tariff Concerns: Rising protectionism and tariff-related tensions have further weakened foreign investors’ risk appetite. Impact on Indian Markets : The steady outflows have contributed to bouts of weakness in benchmark indices and added pressure on the Indian rupee. Sectors dependent on foreign inflows—such as large-cap financials and technology—are particularly exposed to continued FPI selling. Domestic Investors Hold the Fort : While foreign selling has been significant, domestic institutional investors (DIIs) and retail investors have partially offset the impact through consistent buying. Their participation has provided crucial support to market breadth and prevented a deeper correction. Analysts expect near-term volatility to persist as global economic indicators and US monetary policy guide risk appetite. A clearer trajectory for US interest rates and resolution of trade tensions could eventually stabilise flows, but for now, foreign investors remain cautious on India. - MarketForesee Research Desk --------------------------------------------------------------------------------------------------------------------------- Foreign Portfolio Investor Outflows | FPI outflows India September 2025 | ₹7,945 crore FPI selling | ₹1.38 lakh crore net outflows YTD | Indian equities foreign investor exit | global macro risk impact | US policy changes effect on FPI | trade tariff uncertainty India | foreign investor sentiment India | Indian stock market volatility | rupee pressure FPI selling | domestic investors offset FPI exit | Indian market liquidity concerns | FPI withdrawal trend 2025 | foreign funds selling Indian stocks