Domestic Investors Power India's Markets in 2025 as FIIs Retreat

• Domestic institutions significantly increased investments in Indian equity and debt markets in 2025, while foreign investors showed slower growth.
• Mutual funds led the surge, with equity assets rising 20.6% to Rs 52.25 lakh crore and combined assets up 23.34% to Rs 73.21 lakh crore.
• Insurance companies, local pension funds, AIFs, and banks also saw substantial growth in equity assets, driven by retail participation and regulatory support.
• Foreign Portfolio Investors (FPIs) saw only a 4.3% rise in equity assets and were net sellers of Rs 1.66 lakh crore due to valuations, geopolitics, and tariffs.
• Conversely, Foreign Direct Investment (FDI) equity assets recorded a strong 31.2% increase to Rs 40.86 lakh crore.

Why It Matters: Domestic institutions are driving India's market growth in 2025, offsetting FII slowdown.