In December 2025, foreign investors have withdrawn money from Indian government bonds at a record level. Indian sovereign bonds eligible for global bond indices recorded an outflow of about ₹14,300 crore, the largest withdrawal since the launch of the Fully Accessible Route (FAR) in 2020. The biggest reason for this heavy selling was weak rupee, which went to all-time low above 91 against the dollar. This put direct pressure on the returns of foreign investors. Global funds are now shifting towards emerging markets where there is more potential for higher yields and currency appreciation. The effect of this pressure was also visible on bond prices and December showed signs of the biggest decline in the last four months. However, triggers like a possible US–India trade deal in 2026 and global index inclusion could bring a strong comeback in the Indian bond market.

In December 2025, foreign investors have withdrawn money from Indian government bonds at a record level. Indian sovereign bonds eligible for global bond indices recorded an outflow of about ₹14,300 crore, the largest withdrawal since the launch of the Fully Accessible Route (FAR) in 2020. The biggest reason for this heavy selling was weak rupee, which went to all-time low above 91 against the dollar. This put direct pressure on the returns of foreign investors. Global funds are now shifting towards emerging markets where there is more potential for higher yields and currency appreciation. The effect of this pressure was also visible on bond prices and December showed signs of the biggest decline in the last four months. However, triggers like a possible US–India trade deal in 2026 and global index inclusion could bring a strong comeback in the Indian bond market.

FII selloff in 2025: Foreign investors have significantly reduced their stake in the Indian stock market in the year 2025. During this period, approximately Rs 2 lakh crore has been withdrawn from 6 big sectors. This is one of the biggest selloffs seen in recent years. Due to this the stock market is also under pressure.

On Friday, December 26, the Sensex fell by 352.28 points and with this it closed at 85056.43. At the same time, Nifty also closed at the level of 26042.30. The result was that in just one session the market cap of BSE listed companies decreased from Rs 475 crore to Rs 474 crore. That means a direct loss of Rs 1 lakh crore and that too in just one trading session.

In which sectors there was maximum selling

According to NSDL data, foreign investors withdrew the maximum amount of Rs 79155 crore from the IT sector. After this, shares worth Rs 32361 crore were sold in FMCG, Rs 25887 crore in Power, Rs 24324 crore in Healthcare, Rs 21567 crore in Consumer Durables and Rs 19914 crore in Consumer Services. Overall, FIIs have pulled out Rs 1.6 lakh crore from Indian equities so far in 2025. This shows a major change in the sentiment of foreign investors.

Bought shares in other big markets

ICICI Securities said foreign institutional investors were net sellers of Indian equities in 2025, selling shares worth $17.8 billion and increasing their stake in other global equity markets such as China, Japan, Europe and the US. This year, the Indian stock market gave average returns, while the global markets gave profits of 12-61 percent and the emerging markets gave returns of about 23 percent.

This year, the IPO craze was also a major reason for the selling by foreign investors. During this period, foreign investors withdrew money from the secondary market and invested it in the primary market. ICICI Securities said that this year FIIs have invested $ 7.1 billion in IPOs, which is about 40 percent of the amount sold in secondary markets.

Meanwhile, strong inflows into domestic mutual funds through SIPs continued, amounting to Rs 3.2 lakh crore. That means the money that was expected to support the stock market was absorbed by the IPO. Even though money came into domestic mutual funds through SIP, it did not benefit the market much as it was limited to companies.

FIIs withdrew Rs 12,364 crore from realty, Rs 10,894 crore from financial services and Rs 9,242 crore from auto. However, investment has also increased in some sectors this year, in which the highest investment has been made in Telecom at Rs 47,109 crore, followed by Oil and Gas at Rs 9,076 crore and in Services at Rs 8,112 crore.

How will the situation be in 2026?

Experts believe that the situation will gradually improve. Bank of America’s India Research Head Amish Shah also appeared positive about the return of foreign investors to the Indian stock market. He told ET Markets, I think the outflow will be minimal, but whether it will increase the inflow or not is a matter of debate. However, he cited three major reasons why the $18 billion outflow is likely to go towards zero – the Nifty is expected to return about 12 per cent compared to just 4 per cent from the S&P 500, the US Federal Reserve is expected to cut interest rates by 75 basis points—which has historically encouraged inflows into emerging markets—and a possible decline in the US dollar.

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Fiis India 2025: The trust of foreign investors has reduced on the Indian stock market for the last few days. Foreign Institutional Investors (FIIS) has so far sold about Rs 1.98 lakh crore in the year 2025. Talking about September, foreign investors have withdrawn Rs 27,163 crore. The direct impact of which is being seen on the stock market, and the stock market continues to fluctuate.

This process of selling has been continuously continuously for the last 2 years. Fiis are avoiding investing in the Indian market. However, in September, foreign investors have invested Rs 3,278 crore, but it is much less than continuous selling.

Selling continues for last 21 months

Talking about the data, foreign investors have withdrawn a total of Rs 3.19 lakh crore from the Indian market in the last 21 months. In 2024, this figure was Rs 1.21 lakh crore. Which is clearly indicating that FIIs are keeping distance from the Indian market. Due to increase in foreign capital outflows, other investors also do not express confidence in the market and avoid making new investments.

Continuous selling of foreign investors can see market fluctuations. However, despite this, the stock market has become stable. Indian domestic investors are constantly investing in the market, which is likely to normalize the situation.

What is the reason for selling?

Market experts believe that there can be many reasons behind the selling of foreign investors. American tariffs, H-1B visas, 100 percent tariff on special medicines and the global turmoil can also be one of the reasons for this. At the same time, the prices of Indian shares have risen. Because of which foreign investors can consider betting on other markets of the world.

Expectation of better returns from other markets than foreign investors can also be a reason for selling. However, some foreign investors have still shown confidence in the Indian market, and have purchased Rs 3,278 crore in September itself.

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Share Market: Foreign investors seem upset again with Indian shares. In June, foreign investors are in a mood for selling again. In the first week of the month, he has withdrawn Rs 8,749 crore. According to depository data, this major change has been seen after a strong investment of Rs 19,860 crore in May and Rs 4,223 crore in April.

Why suddenly declines in shares?

Himanshu Srivastava, Associate Director of Morningstar Investment Research, said that the American investigation on the Adani Group has shown the trust of investors. The Adani Group is also accused of violation of restrictions related to Iran. These reports have affected the market notion and the price of shares has declined.

Let us know that in a report by Wall Street Journal (WSJ), it has been informed whether the companies of Indian businessman Gautam Adani had imported Iranian liquided petroleum via Mundra Port.

However, the Adani Group has described these allegations as baseless. Meanwhile, the US Department of Justice is busy investigating the activities of LPG tankers being used to send goods to Adani Enterprises. India currently does not import oil and petrochemicals products from Iran due to US sanctions. In May, US President Donald Trump said that countries that buy oil or petrochemicals products from Iran would not be able to do business with America.

In 2025, so far it has been outflow

Earlier, foreign investors sold shares worth Rs 3,973 crore in March, Rs 34,574 crore in February and Rs 78,027 crore in January. With the outflow in June, in 2025, the total withdrawal from Indian equity has crossed Rs 1.01 lakh crore.

However, in the meantime, the Reserve Bank of India (RBI) deducted the repo rate by 50 basis points and a 100 basis point cut in the cash reserve ratio (CRR) and gave the investors night. Foreign investors also sold heavy selling in the date market, during June 2-6, withdrawn Rs 6,709 crore from the date general limit and Rs 5,974 crore from the Voluntary Retention Route. The main reason for this is a low difference between American and Indian Bond Yield.

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Share Market: Foreign institutional investors (FIIs) sold shares worth Rs 6,450 crore on Friday, 30 May. While domestic institutional investors (DIIs) bought shares worth Rs 9,095 crore. This gave the capital market support. During the business session, domestic investors bought shares worth Rs 20,673 crore and sold shares worth Rs 11,577 crore. While foreign investors bought shares worth Rs 44,434 crore and sold shares worth Rs 50,884 crore.

This year so far so much selling

Foreign investors from the Indian stock market sold shares worth Rs 1,21,414 crore so far this year. While domestic investors have bought shares worth Rs 2,75,264 crore. On Friday, the Nifty’s stand remained sluggish. This is the fourth consecutive session of the Nano-range session.

Decline in both Sensex and Nifty

The Nifty fell at 24,751 with the Nifty 50 0.3 percent to close at 24,751 amidst the vigilance of investors and the weak quarterly results of several companies over tariffs and the Sensex closed down by 0.22 percent. Weakness was also seen in the brain market. Both the Nifty Midcap 100 and Smallcap 100 declined by 0.1 percent as there was a selling pressure in the IT, metal and auto sector during the business yesterday.

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Share Market: Despite the tension between India and Pakistan, the trust of foreign investors in the country’s equity market remained unwavering. This month, FPI has purchased Indian shares worth Rs 14,167 crore. India’s fast -moving economy and many other strong domestic basic things are responsible for this. Depository data shows that for the first three months, for the first time, for the first time in April, Rs 4,223 crore was invested.

They will get promotion of foreign investment

Earlier, foreign portfolio investors (FPIs) had withdrawn Rs 3,973 crore in March, Rs 34,574 crore in February and Rs 78,027 crore in January. According to PTI report, Chief Investment Strategist V.K. Vijaykumar said that later the global macrose (the dollar fall in the US and China economy) and domestic macrose (high GDP growth, low inflation and interest rates) will help increase foreign investment in Indian equity. However, he said that bonds or debt flow is likely to be very low.

Balance outflowed by new investment

According to depository data, foreign portfolio investors made a net investment of Rs 14,167 crore in equity this month (till 9 May). This new investment has helped reduce the outflow of Rs 98,184 crore so far in 2025. India’s equity markets saw a sharp jump in FPI activities in April, which is completely opposite to the outflow earlier this year. This fast continued in May too.

Morningstar Investment Associate Director-Manager (Research) Himanshu Srivastava said that this new boom promoted favorable global signals and strong domestic basic things, which increased the trust of investors. He said, on the one hand the talks on the trade agreement between the US-India are going on fast. In addition, the appeal of Indian assets for global investors has increased due to the weakening of the US dollar and the strengthening of the Indian rupee. Along with this, this positive sentiment was also strengthened by improving the March quarter income of several companies in India.

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