Last Updated:
Overseas investors appear to have shifted their bearish stance on Asia’s third-largest economy turning net buyers in October
FPI
Overseas investors appear to have shifted their bearish stance on Asia’s third-largest economy, turning net buyers in October after three consecutive months of heavy selling through September.
A robust start to the September-quarter earnings season, attractive valuations, and improving domestic growth indicators have helped change the sentiment of foreign portfolio investors (FPIs). Their sustained selling has slowed, giving way to renewed buying in Indian equities.
The return of FPI inflows has also driven benchmark indices closer to their record highs — with the Nifty 50 and Sensex now just about 1.55% away from their September 2024 peaks.
FPIs pour Rs 7,362 crore into Indian stocks in October
After pulling billions from local markets in search of better opportunities across other emerging economies, FPIs have invested Rs 7,362 crore in Indian equities so far in October, according to NSDL data.
They had earlier withdrawn a cumulative Rs 76,619 crore over the previous three months. Out of the nine months of 2025, FPIs have been net buyers in only three, with May witnessing the highest inflow of Rs 19,860 crore, while January saw the largest outflow of Rs 78,027 crore.
The optimism also stems from renewed momentum in India–US trade negotiations, which had been stalled for months. Talks have now resumed, and market participants expect an announcement soon. India had initially benefited after US President Donald Trump’s global tariff announcement in April, attracting investors who viewed it as a relatively safe market amid trade disruptions. However, the US later imposed a 50% tariff on Indian goods — the highest in Asia — triggering a sharp wave of outflows and pressure on the rupee.
Meanwhile, global brokerage firms remain bullish on India, citing expectations of an earnings recovery in the second half of FY26. This rebound could be supported by GST rate cuts, potential RBI repo rate reductions, and the government’s pro-consumption policy measures.
Overall outflows still exceed Rs 1.45 lakh crore
Despite October’s inflows, cumulative foreign outflows in 2025 remain significant at Rs 1.47 lakh crore so far. In the January–September period alone, FPIs pulled out Rs 1.56 lakh crore — the second-highest nine-month outflow on record.
The only larger exodus came in 2022, when FPIs sold Rs 1.97 lakh crore amid the Russia–Ukraine war, global rate hikes, and a soaring US dollar. However, inflows returned in late 2022 as markets began pricing in potential US rate cuts, bringing full-year outflows down to Rs 1.46 lakh crore.
Despite persistent foreign selling, Indian equities have remained resilient. The Nifty 50 is up 9.41% so far in 2025 and is on course for its 10th straight annual gain, driven primarily by strong domestic institutional support. Mutual funds and insurance firms have collectively invested Rs 6.10 lakh crore into equities this year — the highest ever recorded annual inflow.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
October 22, 2025, 14:18 IST
Read More
