Foreign Portfolio Investors Turn Cautious Amid Economic Uncertainties
Foreign investors withdrew Rs 7,945 crore from Indian equities in September amid global uncertainties including tariffs and geopolitical tensions. Despite this, they briefly turned net buyers following a US Federal Reserve rate cut. Prospects hinge on upcoming macroeconomic data and tariff negotiations, while debt markets saw increased FPI investment.
- Country:
- India
Foreign investors have pulled significant amounts from Indian equities, with September seeing an outflow of Rs 7,945 crore, driven largely by global uncertainties such as persistent geopolitical tensions and international tariff changes.
This withdrawal follows a trend from previous months, with total equity sell-offs by Foreign Portfolio Investors (FPIs) in 2025 reaching Rs 1.38 lakh crore, according to depository data. Notably, FPIs momentarily shifted stance to become net buyers, acquiring Rs 900 crore worth of equities following a 25 basis point interest rate cut by the US Federal Reserve.
Despite this temporary buying phase, FPIs remain net sellers in September. Experts indicate that upcoming macroeconomic indicators and further tariff negotiations will be crucial in determining FPI trends. Furthermore, while foreign entities have shown modest interest in the debt market, investing under the general and voluntary retention route, the broader outlook remains cautious amid ongoing global challenges.
(With inputs from agencies.)
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