Sellers for now, FPIs may rethink Indian equities

ET Intelligence Group: Foreign portfolio investors (FPI) increased selling intensity in Indian equities during the first fortnight of August compared with the previous month amid rising uncertainty over the country's global trade after the US imposed 25% import duty on Indian goods from August 7 with an extra penalty tariff of 25% slated to be effective on August 27.

However, the latest upgrade in India's credit rating by S&P to BBB from BBB- and a possibility of trade negotiations to avoid high tariffs may prompt FPIs to change stance on Indian equities in the coming weeks. Additionally, the proposed significant overhaul of slab rates under the goods and services tax (GST) Act is expected to reduce the inflationary pressure on consumers thereby supporting demand during the festive season from September.

This, in turn, may lift sentiment among investors.


FPIs sold equities worth ₹20,974.9 crore ($2.4 billion) in the month as of August 14 compared with ₹17,740.6 crore ($2.1 billion) for the whole of July. They were net sellers for eight out of ten trading sessions so far in August. In 2025 so far, they have sold equities worth about ₹1.2 lakh crore ($13.3 billion). This compares with a net purchase of about ₹42,879 crore ($5.2 billion) in the first eight months of 2024.

In the primary market, which consists of investments in initial public offerings (IPOs) and qualified institutional placement (QIP), FPIs slowed their pace with a purchase of ₹2,579.2 crore ($294.1 million) in the first half of August 2025 compared with ₹4,908.6 crore ($573 million) bought in the corresponding period of the previous month.

In the current calendar year so far, they have invested about ₹38,814 core ($4.5 billion) in the primary market compared with ₹54,884 crore ( or $6.6 billion) in the first eight months of the previous year.

Domestic mutual funds partially offset the impact of the FPI outflow by increasing their investment four times to ₹33,223 crore till August 11 compared with ₹Rs 8,310 crore invested in the corresponding period of July.