Renewed Global Confidence and Strong Domestic Fundamentals Drive FPI Inflows
New Delhi, May 11 – Foreign investors have infused ₹14,167 crore into Indian equities in May, reflecting sustained confidence in the country’s economic prospects despite heightened military tensions between India and Pakistan.This marks the second consecutive month of net inflows, building on April’s ₹4,223 crore and reversing the negative trend seen earlier in the year. According to data from depositories, Foreign Portfolio Investors (FPIs) had withdrawn ₹3,973 crore in March, ₹34,574 crore in February, and a staggering ₹78,027 crore in January. The recent inflows have helped reduce the net FPI outflow in 2025 to ₹98,184 crore.
Key Drivers: Global Cues and India’s Economic Strength
Experts attribute this turnaround to declining global risks and India’s resilient economic indicators.“Global macros like a weakening dollar and slowing economies in the US and China, along with India’s strong GDP growth and falling inflation, are driving FPI interest,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He added that while equity inflows are gaining strength, debt investments by FPIs are expected to remain subdued.
Echoing similar sentiments, Himanshu Srivastava, Associate Director of Manager Research at Morningstar Investment, noted, “The improving outlook for a potential US-India trade agreement, the weakening US dollar, and a strengthening rupee have made Indian assets more attractive.” He also pointed to strong quarterly earnings from top Indian companies as another contributor to the bullish sentiment.
16-Day Buying Streak Ends Amid Border Escalation
One of the most notable trends this month has been the consistent buying spree by FPIs, who invested through Indian exchanges for 16 consecutive trading days until May 8, totalling ₹48,533 crore. However, they pulled out ₹3,798 crore on May 9 following the escalation of tensions between India and Pakistan.Despite this geopolitical hiccup, the overall investment pattern remains optimistic.
Debt Market Sees Limited Action
While equities have attracted strong inflows, FPIs pulled out ₹3,725 crore from the debt general limit, with a partial offset of ₹1,160 crore invested via the voluntary retention.With positive macroeconomic indicators and improving global dynamics, experts anticipate continued FPI participation in India’s equity markets in the coming months.
