MUMBAI: Foreign investors withdrew Rs10,355 crore from the country’s equity markets in the last four trading sessions this month, following sweeping tariffs imposed by the US on most nations, including India.
The outflow came after a net investment of Rs30,927 crore over the six trading sessions from March 21 to March 28, which helped reduce the overall March outflow to Rs3,973 crore, according to depository data.
In February, foreign portfolios pulled out Rs34,574 crore, while the outflow was higher at Rs78,027 crore in January. This shift in investor sentiment underscores the volatility and evolving dynamics in global financial markets.
Market participants will closely track the long-term impact of the proposed tariffs, as well as upcoming announcements from the Reserve Bank of India (RBI) regarding its monetary policy stance amid expectations of a potential rate cut, said Manoj Purohit, Partner & Leader, FS Tax, Tax & Regulatory Services, BDO India. These developments are expected to shape investment strategies for the upcoming cycle.
FPI withdrawal
According to the data, FPIs have withdrawn Rs10,355 crore from Indian equities in the last four trading sessions (from April 1 to April 4), bringing the total outflow by FPIs to Rs1.27 trillion so far in 2025.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that the tariffs—which were much steeper than anticipated – raised concerns about their broader economic impact.
He explained that a 10 per cent baseline tariff on all imports, along with a 25 per cent tariff on automobile imports and steep reciprocal tariffs on most countries (26 per cent on India), could lead to higher inflation in the US. There are also growing concerns that these measures might push the US economy toward stagflation.
This uncertainty triggered massive selling in the US markets, with indices such as the S&P 500 and Nasdaq each losing over 10 per cent in just two days. Vijayakumar added that the steep decline in the dollar index to 102 is seen as favourable for capital flows into emerging economies like India.
Apart from equities, FPIs withdrew Rs556 crore from the debt general limit and Rs4,038 crore from the debt voluntary retention route.
