Foreign Investors Dump Indian Market: Record $18B Outflow in 2025

• Foreign Portfolio Investors (FPIs) sold Indian equities worth approximately $18 billion in 2025, marking a 15-year record outflow.
• Reasons included high stock valuations, weak corporate earnings, rising global geopolitical tensions, and stricter US tariffs.
• Despite FPI withdrawals, the Indian market was sustained by strong domestic institutional investor (DII) purchases of about $77 billion.
• Nifty 50 and Sensex gained ~10%, but lagged behind other Asian markets like MSCI Asia ex-Japan (24%) and Shanghai Composite (16%).
• Financial stocks were most affected, experiencing approximately $2.7 billion in outflows; Amundi expects FPIs to return in 2026.

Why It Matters: Domestic investors' strong participation prevented a market collapse despite record foreign sell-off in 2025.