Foreign Investors Exit Indian Stocks with Record ₹1.6 Lakh Crore Outflow in 2025

As per PTI reports, Foreign Portfolio Investors (FPIs) withdrew about ₹1.6 lakh crore ($18 billion) from Indian equities in 2025, marking the highest annual outflow recorded so far.  

The figure surpassed the earlier record of ₹1.21 lakh crore in 2022. It also followed a muted 2024, when net equity inflows stood at just ₹427 crore, after a strong ₹1.71 lakh crore inflow seen in 2023. 

Global Factors Drive Withdrawals 

The selling pressure was largely linked to global developments. Elevated US bond yields improved returns on risk-free assets, while a stronger dollar reduced the relative appeal of emerging market equities.  

Trade-related uncertainty, including concerns around possible US tariffs, and ongoing geopolitical tensions further weighed on global risk appetite, leading to capital moving away from markets such as India. 

Currency and Valuations Add Pressure 

Volatility in the rupee during parts of the year affected dollar-denominated returns for overseas investors. Higher hedging costs also reduced risk-adjusted gains. At the same time, stretched valuations in some segments of the equity market led to profit booking, particularly during periods of global market stress. 

Monthly Flow Pattern Shows Volatility 

FPIs were net sellers in 8 out of the 12 months in 2025. Heavy selling in January crossed ₹78,000 crore, driven by rising US yields and currency weakness. By the end of March, cumulative outflows had reached ₹1.16 lakh crore amid rising trade tensions.  

Inflows returned briefly between April and June, followed by renewed selling from July to September. October saw limited buying before withdrawals resumed in the final two months. 

Domestic Investors Limit Impact 

Despite sustained foreign selling, domestic institutional investors provided support to the equity market. Rising systematic investment plan (SIP) inflows from retail investors helped absorb supply during periods of high FPI outflows, limiting sharper market declines. 

Debt Sees Steady Foreign Interest 

In contrast to equities, FPIs invested around ₹59,000 crore in Indian debt markets in 2025. Flows were supported by India’s inclusion in global bond indices and demand for government securities under the Fully Accessible Route.  

Financial services and IT stocks saw the highest equity outflows, while healthcare, utilities and manufacturing recorded selective inflows during the year. 

Read More:  FPIs Withdraw ₹14,185 Crore From Equities In December; ₹915 Crore Flows Into Debt! 

Conclusion  

Overall, 2025 recorded the highest-ever foreign equity outflows from Indian markets, with global factors playing a larger role than domestic conditions. 

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