- FPIs have withdrawn ₹1.37 lakh crore from Indian equities in 2025.
- Global trade tensions and higher US tariffs are fueling investor concerns.
- Weak corporate earnings add to market volatility.
Foreign Portfolio Investors (FPIs) have maintained a consistent selling trend in Indian equities, withdrawing ₹24,753 crore in the first week of March alone. This extends a three-month outflow streak, bringing the total FPI sell-off in 2025 to ₹1.37 lakh crore.
Domestically, weak corporate earnings and subdued economic growth have further shaken investor confidence. The persistent outflows indicate cautious sentiment, leading to market fluctuations.
Indian Equities Under Pressure as FPIs Extend Selling Spree
The primary driver behind the ongoing FPI sell-off is escalating global trade tensions. The US has imposed higher tariffs on multiple countries, including India, triggering retaliatory duties. These measures have led to uncertainty across global markets, causing investors to reassess their risk appetite. The fear of a prolonged trade dispute has led to capital outflows from emerging markets, including India.
Another significant factor affecting market sentiment is India’s corporate earnings performance. Many companies have reported lower-than-expected profits, raising concerns about economic growth. This has discouraged foreign investors from maintaining their positions in Indian equities, further accelerating the sell-off.
Despite the challenges, domestic institutional investors have played a crucial role in providing stability. Mutual funds and other institutional players have absorbed some of the selling pressure, preventing a steeper market decline. However, their efforts may not be sufficient if FPI withdrawals continue at the current pace.
Looking ahead, investors will closely watch global tariff negotiations and domestic economic indicators. A positive shift in either could help restore confidence in Indian markets and slow down FPI outflows. Until then, volatility is expected to persist.
The persistent sell-off by foreign investors highlights broader economic concerns rather than just short-term volatility. Unless global trade tensions ease and corporate earnings show improvement, the Indian equity market may continue to experience fluctuations.
“Markets are driven by fear and greed, and right now, fear is in control.” – Warren Buffett
