₹18,000 Cr FPI Outflow in August 2025: Tariffs & Weak Earnings Weigh on Markets

Foreign investors have turned net sellers in the Indian equity market this month, pulling out nearly ₹18,000 crore so far in August 2025. The sell off comes amid a combination of negative factors escalating US-India trade tensions, disappointing first-quarter corporate results, and continued weakness in the Indian rupee.

According to depository data, this brings the total equity outflows by Foreign Portfolio Investors (FPIs) to ₹1.13 lakh crore for the year 2025 to date.

Trade Tensions at the Forefront

A major trigger for the latest outflows has been the trade dispute between the US and India. Beginning August 1, the US imposed a 25% tariff on Indian goods, followed by an additional 25% hike during the current week.

This escalation in trade barriers has dampened investor sentiment and weighed heavily on equities.

Corporate Earnings Fail to Impress

As per the news reports, India’s Q1 corporate earnings season has largely been weak with several large companies missing expectations. The underwhelming performance has raised concerns about growth prospects for the rest of the fiscal year.

Rupee Depreciation Adds to Concerns

The Indian rupee’s recent depreciation against the US dollar has further influenced FPI decisions, making Indian assets less attractive in the short term, according to the news reports.

Read More: Dividends & Bonus Issue This Week (August 11–15, 2025): Jio Financial, Reliance, VRL Logistics & More.

Conclusion

The withdrawal of nearly ₹18,000 crore by FPIs in just over a week reflects the combined impact of global trade headwinds, weaker than expected corporate results, and currency pressures. Until these challenges are addressed, the market may continue to face bouts of foreign selling and heightened volatility.

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