Daijiworld Media Network - Mumbai

Mumbai, Jul 20: After three months of consistent fund inflows, foreign investors have turned net sellers, pulling out Rs 5,524 cr from Indian equities so far in July. The withdrawal, triggered by ongoing US-India trade tensions and lacklustre corporate earnings, marks a significant reversal in foreign portfolio investment trends.

According to data from depositories, total FPI outflows have now touched Rs 83,245 cr in 2025, underscoring growing investor caution.

Himanshu Srivastava, Associate Director at Morningstar Investment Research India, said, “The future course of FPI flows will depend heavily on the outcome of trade negotiations between India and the US, as well as a potential recovery in corporate earnings. A positive resolution on both fronts could help restore investor confidence.”

In contrast to the July outflow, FPIs had infused Rs 14,590 cr in June, Rs 19,860 cr in May, and Rs 4,223 cr in April. The sentiment had been bearish earlier in the year, with massive pullouts of Rs 78,027 cr in January and Rs 34,574 cr in February.

“FPIs are now reassessing Indian equity valuations,” said Srivastava. “Trade friction, concerns over US interest rate directions, and mixed earnings have all added to the cautious approach.”

Vaqarjaved Khan, Senior Analyst at Angel One, noted that global uncertainties and India’s ongoing results season have also played a key role in prompting the recent outflow.

Meanwhile, on the debt side, FPIs showed some confidence, investing Rs 1,850 cr in the general debt limit and Rs 1,050 cr under the voluntary retention route.