In FY 2024-25, foreign investors have withdrawn Rs 1.54 lakh crore from the Indian stock market. According to the compiled data of business standard, this is the largest withdrawal ever. Earlier, in the year 2022, global funds withdrawn Rs 1.41 lakh crore between the background of Kovid-19. According to the data, despite heavy selling of foreign investors, Indian domestic investors invested a record of Rs 6 lakh crore in the stock market in FY 2025.
He adopted a shopping strategy during the decline in the stock market, that is, when the stock market fell, he bought more shares. Statistics show that domestic investors had invested Rs 2 lakh crore in FY 2024 and Rs 2.56 lakh crore in FY 2023 as compared to previous years.
Foreign investors invested money with full enthusiasm in domestic shares during the three months of the first half of FY 2025 (April to September). But they have remained a pure selling since October 2024 amid the increasing concerns of the shares and increasing the sluggish concerns over the increase. Apart from this, China’s encouragement measures to improve its economy and threats to impose a fee on US President Donald Trump also affected their investment decisions in Indian shares.
Rajesh Palviya, Senior Vice President (Research), Axis Securities, said, “Some of the major reasons such as reduced earning growth rate, global uncertainty, high levels of bond yields in the US and change in American policy in the US have brought out investment to FIIs.” Palavia said that pension and insurance funds were aggressively selling due to US protectionist policies.
Despite withdrawing money from foreign investors, large share indices like Nifty and Sensex have increased by about 4 percent in this financial year. The index of smallcap and midcap stocks has risen by about 5 per cent. However, due to the selling of foreign investors, these index have come down by about 14 per cent from their highest level.
Analysts are cautious about the re -return of foreign investors as there are still many uncertainty on domestic and global levels. But if the risks are low worldwide, then India can benefit, because the financial year 2026 is expected to be good for India’s economy.
Analysts say the investment of foreign investors in the near future will depend on many things such as increase in earnings of companies, government steps related to consumption promoting growth and rates cut from the Reserve Bank of India. The US will impose additional taxes on some things imported from India from April 2, which may affect India’s exports.
First Published – March 24, 2025 | 10:33 pm IST
Related post