Foreign fund inflows in the debt segment in the first three days of the month were also sharply lower, at $303 million compared with $527 million in November, data from NSDL showed.
Overseas investors remained net sellers in the local equity market in 2025 so far with the net withdrawal amount stood at $17.33 billion. The net withdrawal is $3.91 billion in FY26 to date.
“FPIs are continuously evaluating options across markets and taking calls. The absence of a trade deal with the US can be the main factor weighing on such decisions, also making the rupee volatile,” Bank of Baroda chief economist Madan Sabnavis told ET.
AgenciesRemain net sellers in 2025 with US trade deal still pending; Debt segment draws lower inflows, too
Overvalued stocks and modest earnings have also prompted the exits, pointing to limited upside in the near future for Indian financial assets and the currency, he said..
FPIs, meanwhile, are net buyers of Indian debt on expectations of a US rate cut and due to the favourable yield differential between the local and US markets.
The steep outflow in the first three days, however, could be an aberration when compared with the previous month’s data. This may even out when foreign investment in some of the large initial public offering (IPO), such as ICICI Prudential Asset Management Co, ecommerce unicorn Meesho and renewable energy platform Clean Max Enviro Energy Solutions, come in, people aware said.
Meesho, precision engineering and manufacturing company Aequs, and maker of copper and aluminum wire Vidya Wires opened for subscription Wednesday to raise nearly ₹6,643 crore between them. Wednesday, however, saw a net outflow of $449 million in equities.
The Reserve Bank of India‘s (RBI) November bulletin showed that FPIs showed keen interest in Indian IPOs this year while they offloaded secondary market stocks.
