FPIs Inject ₹6,480 Cr Into Indian Equities in October After Three-Month Withdrawal

After three consecutive months of net withdrawals, foreign portfolio investors (FPIs) have returned to Indian equities with a ₹6,480 crore inflow in October so far. This comes after persistent outflows of ₹17,700 crore in July, ₹34,990 crore in August, and ₹23,885 crore in September, reflecting a notable shift in global investor sentiment towards India.

Key Drivers Behind the Inflows

Several factors are driving this renewed interest. According to Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India, “India’s macroeconomic backdrop remains relatively strong among emerging markets, with stable growth, manageable inflation, and resilient domestic demand supporting investor confidence. Global liquidity is gradually easing, prompting funds to flow back into higher-return emerging markets.”

Valuations in Indian equities have also become more attractive after recent selling pressure, prompting fresh dip-buying activity. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, observed, “The principal reason for this shift in FPI strategy is the reduced valuation differential between India and other markets. India’s underperformance over the past year has created prospects for improved relative returns.”

Debt Market Interest

FPIs are not only returning to equities but also showing interest in debt instruments. Till October 17, about ₹5,332 crore has been invested under the general limit and ₹214 crore through the voluntary retention route, signalling confidence in Indian debt alongside equities.

Read More:Sebi Chief Says FPI Outflows Not a Concern as Long-Term Confidence Remains Strong

Conclusion

While October shows positive inflows, FPIs have still withdrawn around ₹1.5 lakh crore from Indian equities so far in 2025, indicating that the market is gradually recovering from previous selling pressure.

In the debt market, FPIs have also maintained interest, investing approximately ₹5,332 crore under the general limit and ₹214 crore through the voluntary retention route until October 17, reflecting confidence in India’s debt instruments alongside equities.

Moving forward, monitoring earnings trends and trade developments will be crucial in understanding the sustainability of this positive momentum.

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