Foreign portfolio investors (FPIs) have sold a record amount of Indian equities in 2025, highlighting sustained capital outflows amid global volatility and shifting investor sentiment. According to NSDL data, FPIs have offloaded a net $18.4 billion (around ₹1.6 lakh crore) of Indian stocks as of December 12, marking the highest annual sell-off on record and surpassing the previous peak set in 2022.
Record Selling Across Markets
The total foreign selling includes net sales in both the primary and secondary equity markets. This year’s sell-off exceeds the earlier high of $16.5 billion recorded in 2022, underscoring the scale of FPI withdrawals from Indian shares.
In the secondary market, selling was particularly heavy, with FPIs reducing holdings by more than in any previous year — outpacing the previous peak for secondary market sales. Meanwhile, primary market activity from foreign investors has been comparatively subdued, indicating a broader shift in their equity strategy.
Domestic Investors Step In
Amid heavy foreign outflows, domestic mutual funds and institutional investors continued to buy Indian equities through 2025, helping cushion some of the selling pressure. Local funds remained net buyers each month, signaling stronger confidence from domestic market participants even as global funds reduced exposure to Indian stocks.
Market Impact and Outlook
The large scale of FPI sell-offs has added to market volatility and weighed on investor sentiment, particularly in segments where foreign ownership is high. Broader market data shows that while domestic buyers have offered some support, equity benchmarks have experienced mixed trading sessions amid these outflows and global cues.
Additionally, broader Asian markets saw pressure linked to concerns over technology sector valuations and profit expectations, contributing to risk-off behavior among global investors.
Why This Matters
Foreign portfolio investment flows are often seen as a barometer of global confidence in markets. Record sell-offs can reflect shifts in global asset allocation, rising yields abroad, geopolitical worries or perceptions around growth prospects. For India, sustained FPI outflows can impact currency valuations, liquidity and market breadth — even as domestic institutional participation helps absorb some of the impact.
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