Foreign investors are slowly and steadily returning to the Indian equity market, as evidenced by the Rs 8,500 crore worth of investments made by them in the last trading week. Despite a shorter trading week due to holidays, foreign investors still managed to pump in around Rs 8,500 crore into Indian equities, according to data from the National Securities Depository Limited (NSDL). The Indian stock markets witnessed positive foreign portfolio investment (FPI) inflows during the week, even though trading occurred only on three days — Tuesday, Wednesday, and Thursday — due to holidays on Monday and Friday. This week’s positive FPI inflows signal a comeback of foreign investors who were selling for some months in the equity segment. This helped the markets to close the week on a positive note. The primary reason behind this inflow is the weakening of the US dollar. As the dollar declines and currencies like the Indian rupee strengthen, it becomes more attractive and easier for FPIs to shift their investments from the US to countries like India. According to Aashish P Sommaiyaa, Executive Director & CEO, WhiteOak Capital, the positive fallout of the USA tariff scenario and impending global slowdown is two fold. Firstly, it comes with declining dollar and relative strengthening of emerging market currencies like rupee. This makes it easier for FPIs to allocate money out of the US into markets like India. Furthermore, Sommaiyaa added that this trend gives the RBI leeway to run easier monetary and credit conditions. Also, given the global economic scenario with China and the US both heading for slowdown, domestic oriented markets like India will attract more flows. Despite this week’s strong inflow, the overall FPI activity in April remains in the negative zone. So far in April, FPIs have pulled out a net Rs 23,103 crore from Indian equities. The broader picture for 2025 also shows a negative trend, with total net outflows of Rs 1,39,677 crore from the equity market this year. While the recent inflows offer some relief, market watchers will closely monitor if this trend continues in the coming weeks or if global uncertainties once again impact investor sentiment.

• Foreign investors are slowly and steadily returning to the Indian equity market
• The recent inflows offer some relief, but overall FPI activity in April remains in the negative zone
• Market watchers will closely monitor if this trend continues in the coming weeks or if global uncertainties once again impact investor sentiment

• FPI inflows signal a comeback of foreign investors who were selling for some months in the equity segment
• The primary reason behind this inflow is the weakening of the US dollar
• Foreign investors are shifting their investments from the US to countries like India due to the strengthening of emerging market currencies

• The RBI will benefit from the easier monetary and credit conditions
• Dominantly, markets like India will attract more flows due to the global economic scenario

“The positive fallout of the USA tariff scenario and impending global slowdown is two fold – one it comes with declining dollar and relative strengthening of emerging market currencies like rupee – which makes it easier for FPIs to allocate money out of USA into markets like India.” – Aashish P Sommaiyaa, Executive Director & CEO, WhiteOak Capital

Foreign Portfolio Investment (FPI): It refers to the investment made by foreign entities such as non-resident Indians, foreign companies, and foreign governments in the securities of Indian companies.

Easier Monetary Conditions: It refers to the relaxation of interest rates and other monetary policies by a central bank, leading to an increase in the money supply and a decrease in interest rates, making it easier for businesses and individuals to borrow money and invest in the economy.

Emerging Market Currencies: It refers to the currencies of countries that are experiencing rapid economic growth and are considered to be on the rise in terms of value and importance in the global economy.

Relief for RBI: It refers to the financial assistance or support provided to the Reserve Bank of India (RBI) by the central government or other entities in times of economic crisis or uncertainty.

In conclusion, the recent FPI inflows offer some relief to the Indian equity market, but the overall FPI activity in April remains in the negative zone. Market watchers will closely monitor if this trend continues in the coming weeks or if global uncertainties once again impact investor sentiment. The strengthening of emerging market currencies, declining US dollar, and impending global slowdown are some of the key factors that are contributing to the positive FPI inflows in India.

Therefore, investors and market watchers must be vigilant and monitor the situation closely to make informed investment decisions.

As the Indian economy continues to grow and develop, it is likely to attract more foreign investments in the coming years.