FPIs Pull Out ₹12,257 Crore in first week of Sep Amid Dollar Strength, Tariff Worries

8 Sep 2025 , 12:11 PM

Foreign investors pulled out ₹12,257 crore (USD 1.4 billion) from Indian equities in just the first week of September, extending the trend of steady withdrawals.

This comes on top of ₹34,990 crore in outflows during August and another ₹17,700 crore in July, pushing total equity withdrawals by FPIs in 2025 to ₹1.43 lakh crore, according to depository data.

On the domestic front, concerns around slowing corporate earnings and stretched valuations also pushed investors to book profits. Indian equities are still trading at a premium to most other emerging markets, which has made them more vulnerable to selling pressure.

Looking ahead, market watchers say FPI activity will hinge on US Federal Reserve signals, labour market readings from the US, and the RBI’s policy stance on the rupee and interest rates. Some experts believe the current volatility could ease once global uncertainties settle, with India’s reform momentum, GST rationalisation, and the potential for an earnings rebound acting as strong pull factors for foreign investors.

The heavy selling has been absorbed to some extent by domestic institutional investors, who have been steady buyers. This has allowed FPIs to exit at higher valuations and reallocate funds to cheaper Asian markets like China, Hong Kong, and South Korea. In the debt market, FPIs showed mixed interest they put in ₹1,978 crore under the general limit but pulled out ₹993 crore through the voluntary retention route.

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