FPIs Withdraw ₹24,753 Crore from Indian Equities in Early March Amid Global Uncertainties
In the first week of March 2025, foreign portfolio investors (FPIs) withdrew a substantial ₹24,753 crore from Indian equities, marking a significant outflow that has raised concerns among market participants. This recent withdrawal contributes to a cumulative outflow of ₹1.37 lakh crore by FPIs in 2025, highlighting a persistent trend of foreign investors reducing their exposure to Indian markets.
Several factors have contributed to this trend. Global economic uncertainties, including concerns over inflation and tightening monetary policies in developed economies, have led investors to adopt a risk-averse stance, prompting them to pull funds from emerging markets like India. Additionally, domestic challenges such as slowing economic growth and corporate earnings have further dampened investor sentiment.
The impact of these outflows is evident in the performance of the Indian stock market. Major indices have experienced volatility, reflecting the cautious approach adopted by both foreign and domestic investors. The sectors most affected include banking, information technology, and consumer goods, which are heavily reliant on foreign investments.
The Reserve Bank of India (RBI) has been closely monitoring these developments. In response to the depreciation pressures on the Indian rupee due to sustained FPI outflows, the RBI is expected to intervene in the foreign exchange market to stabilize the currency and maintain investor confidence.
Market analysts suggest that the trend of FPI outflows may continue in the short term, especially if global economic conditions remain uncertain. However, they also note that India’s strong economic fundamentals, such as a large consumer base and ongoing structural reforms, could attract investors back in the long run.
In conclusion, the significant withdrawal of ₹24,753 crore by FPIs in the first week of March underscores the challenges faced by the Indian equity market amid global and domestic headwinds. Stakeholders are hopeful that with appropriate policy measures and improving economic indicators, investor confidence will be restored, stabilizing the market in the coming months.
