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India Markets See Major FPI Outflow Amidst Global Woes
13 Dec, 2025
Summary
- FPIs withdrew over ₹12,941 crore from Indian markets last week.
- Outflows impacted both equity and debt segments significantly.
- Rupee depreciation and rich valuations deterred foreign investors.
Foreign Portfolio Investors (FPIs) significantly reduced their holdings in Indian markets, withdrawing ₹12,941.34 crore in the week concluding December 12, 2025. This outflow, comprising ₹6,135.33 crore from equities and ₹6,891.47 crore from debt, intensified selling pressure.
The sustained selling was attributed to global factors like elevated US interest rates and tighter liquidity, which encouraged a preference for developed market assets. The sharp depreciation of the Indian rupee to record levels further dampened sentiment, as currency losses eroded dollar-based returns for foreign investors.
Despite the Reserve Bank of India's decision to reduce the policy repo rate, rich domestic equity valuations also made India appear less attractive compared to other emerging markets. Analysts anticipate FPI flows to remain volatile amid ongoing global growth uncertainties and geopolitical tensions.
