Despite a shortened trading week due to holidays, foreign investors made a notable return to Indian equities, injecting approximately Rs 8,500 crore, according to data from the National Securities Depository Limited (NSDL).
The Indian stock markets witnessed positive foreign portfolio investment (FPI) inflows during the three active trading days – Tuesday through Thursday – as markets were closed on Monday and Friday. This fresh wave of investments marks a shift in sentiment, as foreign investors had been net sellers in recent months. One of the key drivers behind this renewed interest is the weakening of the US dollar, which has made emerging markets like India more attractive.
As the dollar loses strength and currencies like the Indian rupee appreciate, it becomes easier and more appealing for FPIs to reallocate funds from the US to markets such as India. Aashish P Sommaiyaa, Executive Director & CEO of WhiteOak Capital, told ANI, “The positive outcome of the US tariff environment and the looming global slowdown is twofold: first, a declining dollar and strengthening emerging market currencies make reallocations toward markets like India more favorable for FPIs.”
He further explained, “This scenario also gives the RBI more flexibility to maintain accommodative monetary and credit conditions. With both the US and China showing signs of an economic slowdown, domestic-focused markets like India are well-positioned to attract increased investment.”
However, despite the robust inflows seen between April 15 and April 17, the overall FPI trend in April remains negative. So far this month, foreign investors have pulled out a net Rs 23,103 crore from Indian equities. The broader outlook for 2025 also paints a cautious picture, with total net outflows from the equity market amounting to Rs 1,39,677 crore for the year.
