FPIs Pull Record ₹1.6 Lakh Cr from Indian Equities in 2025; Debt Market Sees Inflow

• Foreign Portfolio Investors (FPIs) withdrew a record ₹1.58 lakh crore from Indian equities in 2025, marking the worst year for equity flows.
• Key reasons for the withdrawal include volatile currency, global trade tensions, elevated valuations, rising US bond yields, and geopolitical uncertainties.
• FPIs invested ₹59,000 crore in the Indian debt market, driven by inclusion in global indices and higher interest rates.
• Experts anticipate a reversal in this trend in 2026, citing accelerated growth, potential US trade deals, Fed rate cuts, and domestic reforms.
• Domestic Institutional Investors (DIIs) and retail SIPs provided a counterbalance to the FPI selling pressure.

Why It Matters: Record FPI equity outflow in 2025 due to global factors; debt market gained, 2026 outlook positive.