Foreign investors sold the most in the financial year 2024-25, barring 2022, when the outgo was led by Covid-19 pandemic, according to data from NSDL.
Foreign institutional investors sold Indian equities amounting to ₹1,27,041 crore. The net investment position in the previous fiscal was ₹2,08,212 crore. Foreign investor interest in Indian markets has been on the wane since October 2024, if the net investment position is any indication. In the fiscal 2025, foreign investors were net sellers of Indian equities in 7 out of 12 months.
The relentless selling, however, slowed in the last three months, with the March figure of ₹3,973 crore being the lowest. Analysts have been citing lower than expected earnings, currency depreciation, higher valuations, and relatively more attractive U.S. bonds among others as reasons behind the outflow. To be sure, there has been a general outflow from most of the emerging economies.
A long-term analysis of the trend suggests that FPIs were net buyers of Indian equities in six out of the past 10 fiscals, with the quantum of equity sales increasing after 2019-20. This was much less than in the decade before, when FPIs were net buyers in nine fiscal years.
In the past five years, FPIs were net sellers in three of them. In two of these three, foreign investors buying in Indian equities was at record high levels. It hit a new record in 2020-21 followed by a record sale in the very next year, making the period between 2020-21 and 2024-25 more volatile than the period between 2014-15 and 2018-19.
Analysts say movements in both global and domestic investments will largely depend upon the announcement of tariffs by the U.S.
Published – March 31, 2025 09:41 pm IST
