Foreign Investors Pull Out Rs 24,753 Crore from Indian Markets in March, Continued Selling Trends Raise Stability Concerns

Foreign Portfolio Investors have withdrawn Rs 24,753 crore from Indian markets in March amid weak corporate earnings and a strong dollar. Total net outflows for 2025 have reached Rs 1,37,354 crore, raising concerns about India's market stability as valuation and economic growth lag behind investor expectations.

Foreign investors continue to withdraw substantial funds from Indian stock markets, with Foreign Portfolio Investors (FPIs) registering net sales of Rs 24,753 crore in March's first week, according to data from the National Securities Depository Limited (NSDL). These withdrawals extend the trend of major selling activity this year, bringing total net FPI outflows in 2025 to Rs 1,37,354 crore.

The persistent selling raises worries over market stability, driven by FPIs' cautious stance on India's economic growth and corporate health. Primary concerns among foreign investors include underwhelming earnings from Indian firms, a GDP growth rate trailing expectations, and a significant rise in the U.S. Dollar Index. A robust dollar weakens the appeal of emerging market investments, triggering capital retreat from nations like India. Moreover, valuation issues add to the exodus, as many investors view Indian stocks as overvalued compared to other emerging markets, prompting a shift to more promising and less risky markets.

Recently, February saw foreign investors selling equities worth Rs 34,574 crore, and this ongoing exodus has affected market stability, fueling volatility in Indian equities. In January, FPIs withdrew Rs 78,027 crore, while December of the previous year ended on a positive note with net FPI investments at Rs 15,446 crore. However, 2024 ended with a sharp investment decline, with net buying down to just Rs 427 crore. A significant 99 percent decrease in FPI inflows in 2024 compared to the previous year underscores these concerns.

(With inputs from agencies.)