FPIs Withdraw Rs 5,524 Crore From Indian Markets In July Amid US-India Trade Tensions

After several months of funds being infused, foreign investors turned net sellers with withdrawal of Rs 5,524 crore thus far in July 2025, as a result of ongoing trade tensions between the US and India and mixed investors sentiments basis corporate results.

The overall outflow has crossed the Rs 83,000 crore mark in 2025, as per data with depositories showed.  

The foreign portfolio investors (FPIs) flows will reportedly depend on the how the US-India trade negotiations and corporate earnings turnout.

According to sources, India and the U.S have agreed on most items, expect verticals like pharmacueticals, where in the U.S. pins its hopes on favourable terms.

Meanwhile, a resolve to settle trade disputes and recovery in earnings could potenially works in gaining investor confidence, and attract FPIs back to Indian markets,

As per the depositories data, Foreign Portfolio Investors (FPIs) have withdrawn a net sum of Rs 5,524 crore from equities till July 18).

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This occured after a net investment of Rs 14,590 crore in June, Rs 19,860 crore in May and Rs 4,223 crore back in April. Prior to this, FPIs had withdrawn Rs 3,973 crore in March, Rs 34,574 crore in February, and a whooping Rs 78,027 crore in January.

However, FPIs turned the tables to a bearish stance which can be credted to heightened market valuations. However ongoing trade pact dealings between India and the US, and expectations set on the US interest rate policies creates an environment of caution.

While elevated market valuations prompted FPIs to reassess the attractiveness of Indian equities, ongoing trade tensions, especially between the US and India, and concerns over US interest rate policies contributed to a cautious investment outlook.

Additionally, mixed corporate earnings raised doubts about the sustainability of corporate profitability.

However, FPIs have already infused Rs 1,850 crore in the debt general limit and ₹Rs 1,050 crore in the debt voluntary retention route during the aforementioned period.