Mumbai: Foreign Portfolio Investors (FPIs) continued to pull money out of Indian equities in December, withdrawing Rs 17,955 crore in the first two weeks of the month. With this, total foreign outflows from equities in 2025 have reached nearly Rs 1.6 lakh crore, or about USD 18.4 billion, according to data from the National Securities Depository Ltd (NSDL).
This follows a net outflow of Rs 3,765 crore in November, keeping pressure on domestic stock markets.
A Volatile Investment Pattern
The recent selling trend comes after a brief break in October, when FPIs invested Rs 14,610 crore, ending three straight months of heavy withdrawals. However, the relief was short-lived. FPIs sold equities worth Rs 23,885 crore in September, Rs 34,990 crore in August, and Rs 17,700 crore in July, highlighting the cautious approach of overseas investors toward Indian markets this year.
Why FPIs Are Pulling Out
Market experts say several factors are driving this sustained outflow. A sharp fall in the Indian rupee has reduced returns for foreign investors when converted into dollars. At the same time, Indian stock valuations remain high, making markets less attractive compared to other emerging economies offering better value.
Himanshu Srivastava of Morningstar Investment Research India said high US interest rates, tight global liquidity, and a preference for safer investments in developed markets have weakened investor interest in India.
Adding to this, Angel One’s Vaqarjaved Khan pointed to year-end portfolio adjustments, global fund rebalancing, and ongoing economic uncertainty as further reasons behind the selling.
Domestic Investors Provide Support
Despite heavy foreign selling, Indian markets have not seen a sharp fall. This is mainly due to strong buying by domestic institutional investors (DIIs), who invested Rs 39,965 crore during the same period, more than offsetting the FPI outflows.
Outlook Remains Hopeful
Some experts believe the selling pressure may not last much longer. VK Vijayakumar of Geojit Investments said continued heavy selling is unlikely given India’s strong economic growth and improving earnings outlook.
Khan added that progress on a US-India trade agreement could help bring foreign investors back.
Meanwhile, in the debt segment, FPIs withdrew Rs 310 crore under the general limit but invested Rs 151 crore through the voluntary retention route.