FPI selloff resumes: ₹32,000 crore withdrawn in April as global trade tensions heighten
Indian stock market today: After months of relentless selling, FPIs turned net buyers in the final week of March. However, the buying momentum was short-lived as they turned sellers again in April, pulling out ₹32,121 crore from Indian equities over the last seven trading sessions amid escalating global trade tensions that triggered a risk-off sentiment among investors.
Between ₹32,576 crore into Indian equities”>March 20 and March 27, overseas investors infused ₹32,576 crore into Indian equities, helping reduce the overall outflow for March to ₹3,973 crore, according to depository data.
In February, FPIs pulled out ₹34,574 crore, while January saw an even higher outflow of ₹78,027 crore. Between October 2024 and February 2025, FPIs withdrew more than ₹3 lakh crore from the Indian stock market, largely driven by concerns over lofty valuations and weak corporate earnings.
Notably, strong overseas investor selling in April so far is being offset by robust domestic inflows, making Indian benchmark indices more resilient compared to some Asian peers—several of which have entered bear market territory.
According to the latest depository data, domestic institutional investors (DIIs) bought stocks worth ₹34,000 crore in the secondary market. Despite overseas investors pulling out trillions of rupees from the Indian stock market, they still hold 16.8% of Indian equities as of March 2025.
As of end-March 2025, foreign institutional investor (FII) equity Assets Under Custody (AUC) stood at ₹66.8 trillion, marking a 7% increase from ₹62.4 trillion in February 2025, according to analysts.
Sebi eases FPIs’ disclosure norms
Meanwhile, the markets regulator Securities and Exchange Board of India (Sebi) recently eased disclosure norms for foreign portfolio investors by doubling the asset threshold to ₹50,000 crore for making granular beneficial ownership disclosures.
The decision comes in light of the growing market size. Accordingly, the Sebi stated in a circular that the size threshold has been increased from ₹25,000 crore to ₹50,000 crore.
Under the revised framework, FPIs—either individually or as part of an investor group—holding more than ₹50,000 crore of equity AUM in Indian markets must now disclose details of all entities holding any ownership, economic interest, or control on a full look-through basis. Sebi added that the new framework comes into immediate effect.
The Reserve Bank of India (RBI), in early April, announced that the limits for FPI investment in government securities (G-Secs), state government securities (SGSs), and corporate bonds will remain unchanged at 6%, 2%, and 15%, respectively, of the outstanding stock of securities for FY2025–26.
Indian stock markets cheer US tariff pause; will the rally hold?
The Indian stock market made a stellar comeback in Friday’s trading session (April 11), with both benchmark indices surging by 2.4% to intraday highs. This rally came after U.S. President Joe Biden announced a pause on reciprocal tariffs for many countries that have not imposed retaliatory measures against the U.S.
India was among the countries included in this move, with the proposed 26% tariffs now paused for 90 days. However, domestic brokerage firm Kotak Institutional Equities noted that there is no change in the U.S.’s strategic goals, which continues to create significant uncertainties for countries (in terms of tariff levels), exporters (regarding new capex and orders), and companies (impact on earnings).
The U.S. has temporarily suspended reciprocal tariffs for 90 days for all countries—except China—in order to negotiate trade deals, though the base tariff of 10% remains.
Kotak sees a modest upside for Indian markets, which have held up relatively well compared to global peers due to India’s relatively low export-to-GDP ratio, the dominance of defensive and domestic sectors in market earnings, and the broader narrative of India being better positioned under a reciprocal tariff regime.
Despite this ‘positive’ development, Kotak maintains its cautious stance on Indian equities, citing fair-to-expensive valuations across most sectors and continued uncertainties around the global tariff situation.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
