FPIs Offload Rs 1.76 Lakh Crore in 2025 Despite Strong Indian Economy

According to NSE data, total FPI investments in India stood at USD 950 billion as of June 2025, with the US accounting for USD 388 billion. Out of 11,866 registered FPIs in India by March 31, 2025 (up from 11,219 a year earlier), the US led with 3,571 investors, followed by Luxembourg (1,448), Ireland (846) and Canada (825).

“FPIs continued their selling spree in the first week of September, offloading equities worth Rs 5,666 crore in the cash market. This takes the total FPI selling in 2025 to Rs 1,76,606 crore, following Rs 1,21,210 crore of selling in 2024. The scale of selling is massive,” said V.K. Vijayakumar, Chief Investment Strategist, Geojit Investments.

The heaviest outflows were in January and February, coinciding with Donald Trump’s swearing-in as US President, when FPIs sold equities worth Rs 78,027 crore and Rs 34,574 crore respectively.

This selling persists despite India’s strong economic fundamentals, including high GDP growth, a favourable monsoon (though with damages), and robust manufacturing performance.

Worried about the exodus of foreign investors, SEBI Chairman Tuhin Kanta Pandey said in the regulator’s FY 2024-25 annual report:
“SEBI will focus on easier access to India’s capital market for FPIs and frame investor-friendly regulations to attract more investments.”

Domestic institutional investors (DIIs) have cushioned the impact of FPI selling by buying aggressively. “Sustained DII buying is enabling FPIs to encash at high valuations and redirect funds to cheaper markets like China, Hong Kong, and South Korea. Even GST-driven optimism could not prevent FPIs from selling daily in September. Trump’s tariff-related uncertainty is weighing heavily on them,” said Vijayakumar.

He added that the market is also jittery about Trump’s next move, with fears that he may impose tariffs on Indian IT services.

Still, the primary market has seen steady foreign inflows. SEBI’s August bulletin noted that while the secondary market saw net FPI outflows of Rs 31,988 crore, the primary market received inflows of Rs 14,248 crore, resulting in net outflows of Rs 17,741 crore—most of which occurred in the second half of the month before the August 1 US tariff deadline.

India’s forex diversification strategy may also be a concern. India’s holdings of US Treasury bills fell to USD 227 billion in June 2025, from USD 242 billion a year earlier. Meanwhile, the rupee hit a record low of 88.27 per US dollar last week, further hurting US-based FPIs due to their heavy exposure.

Another development was SEBI’s action against US derivatives trader Jane Street Group, which has appealed to the Securities Appellate Tribunal after depositing Rs 4,843.57 crore in an escrow account. Jane Street is seeking removal of restrictions and access to documents behind SEBI’s order.

Commenting on the episode, Angel One Chairman & MD Dinesh Thakkar said:
“Players may change, but India’s capital market continues to deepen, diversify, and grow. The momentum is structural, and the opportunity enduring.”

Top 10 Countries Investing in India (as of June 2025)
(in USD Billion)

• US: 388

• Singapore: 80

• Luxembourg: 72

• Ireland: 57

• Mauritius: 46

• UK: 44

• Norway: 34

• Japan: 29

• Canada: 25

• France: 21

Source: NSE, NSDL