New Delhi, March 8: Foreign investors are persistently withdrawing funds from Indian stock markets, with Foreign Portfolio Investors (FPIs) selling equities worth Rs 24,753 crore in the first week of March, as per data from the National Securities Depository Limited (NSDL).
This latest round of outflows contributes to the ongoing selling trend, pushing the total FPI outflows for 2025 to Rs 1,37,354 crore.
This continued outflow has raised concerns about the stability of the Indian stock market, as foreign investors remain cautious about India's economic growth and corporate performance. The main reasons for this sustained selling include disappointing earnings from Indian companies, slower-than-anticipated GDP growth, and the sharp rise in the U.S. Dollar Index. A stronger dollar makes emerging market investments less appealing, leading to capital outflows from countries like India.
Valuation concerns have also played a significant role in the exodus. Many foreign investors view Indian stocks as overpriced compared to other emerging markets, prompting them to divert funds to markets offering better growth prospects and lower risks.
In February, foreign investors sold equities worth Rs 34,574 crore, continuing the trend of significant FPI outflows. This has led to increased volatility in the Indian stock market. In January, FPIs withdrew Rs 78,027 crore. In contrast, in December 2024, there was a net positive investment of Rs 15,446 crore, marking a brief period of foreign investor optimism. However, the overall FPI participation in Indian equities saw a sharp decline, with net investments for the year 2024 falling by 99% compared to the previous year. The year ended with a drastically reduced net buying value of only Rs 427 crore.
This pattern of diminished foreign investments and persistent capital outflows raises questions about the future stability of the Indian market, highlighting the challenges facing the country’s economic environment.
(With agency inputs)
