FPIs withdraw Rs 30,000 crore from equities in first fortnight in March

Foreign investors continue to pull back money from the Indian equity market withdrawing a little over Rs 30,000 crore in the first fortnight of the month amid escalation in global trade tensions.

This came following an outflow of Rs 34,574 crore from equities in February and Rs 78,027 crore in January.

With these, the total outflow by FPIs has reached Rs 1.42 lakh crore (USD 16.5 billion) in 2025 so far, data with the depositories showed.

According to the data, Foreign Portfolio Investors (FPIs) offloaded shares worth Rs 30,015 crore from Indian equities this month (till March 13).

This also marks the 14th consecutive week of net outflows.

The prolonged selling pressure is driven by a combination of global and domestic factors.

The uncertainty surrounding US trade policies under President Donald Trump, raising concerns about a potential tariff-induced recession, has weighed on global risk appetite, prompting FPIs to adopt a cautious stance towards emerging markets like India, Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment, said.

Another key factor driving FPI outflows has been elevated US bond yields and a strong dollar, which have made American assets more appealing.

Also, depreciation of the Indian rupee has further exacerbated this trend, as it erodes returns for foreign investors.

Moreover, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted that the FPI outflows from India have been mainly going into Chinese stocks that have been outperforming other markets in 2025.

"The recent decline in the dollar index will limit the fund flows to the US. However, the heightened uncertainty triggered by the trade war between the US and other nations is likely to push more money into safe asset classes like gold and dollar," he added.

On the other hand, they invested Rs 7,355 crore in debt general limit and withdrew Rs 325 crore from debt voluntary retention route.

The overall trend indicates a cautious approach by foreign investors, who scaled back investments in Indian equities significantly in 2024, with net inflows of just Rs 427 crore.

This contrasts sharply with the extraordinary Rs 1.71 lakh crore net inflows in 2023, driven by optimism over India's strong economic fundamentals. In comparison, 2022 saw a net outflow of Rs 1.21 lakh crore amid aggressive rate hikes by global central banks.