Foreign Investors Pull Out ₹12,667.9 Crore from G-Sec Under FAR in December 2025

Foreign portfolio investors (FPIs) pulled out ₹12,667.921 crore from government securities under the Fully Accessible Route (FAR) in December, data from the Clearing Corporation of India (CCIL) showed. This was the highest monthly outflow since May 2025, when withdrawals stood at ₹13,164.925 crore. 

As of December 31, total FPI holdings in FAR government bonds fell to ₹3.09 lakh crore, compared with ₹3.22 lakh crore on December 1. December marked the 2nd straight month of outflows after November, when FPIs sold bonds worth ₹4,177.2 crore. 

Earlier Inflows Reverse 

The recent selling followed a period of steady foreign buying. In October, FPIs invested ₹13,417.4 crore in FAR bonds. September saw inflows of ₹8,009.2 crore, while August recorded net investments of ₹11,039.9 crore. 

These inflows had pushed aggregate FPI holdings above ₹3.21 lakh crore by early November. However, holdings declined over the following weeks as market conditions changed, with December closing at lower levels compared with the start of the quarter. 

Bond Yields Rise During December 

The foreign outflows coincided with a rise in domestic bond yields. This came despite a 25 basis point rate cut announced by the Monetary Policy Committee, as expectations of further easing weakened. 

During December, the yield on the 10-year benchmark government bond rose by around 10 basis points. It largely traded between 6.53% and 6.62% through the month. The benchmark yield is currently around 6.64%. 

Global Factors Add Pressure 

Overseas developments also influenced flows. Rising yields on Japanese government bonds contributed to cautious positioning across emerging market debt. This had an impact on foreign investment in Indian government securities under the FAR route. 

FAR Bonds Explained 

FAR bonds were introduced in 2020 to allow non-resident investors to invest in selected Indian government securities without any investment limits. The framework was aimed at increasing foreign participation in the domestic bond market. 

Read More: Foreign Investors Exit Indian Stocks with Record ₹1.6 Lakh Crore Outflow in 2025! 

Conclusion 

December data shows a clear slowdown in foreign investment in FAR government bonds compared with earlier months. Higher bond yields and global market movements weighed on flows, leading to the highest monthly outflow since May. 

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