Foreign Investors Pull Out ₹10,355 Crore from Indian Equities Amid Global Tariff Shock

Foreign portfolio investors (FPIs) have pulled out ₹10,355 crore from Indian equity markets over the last four trading sessions of April (April 1 to April 4), as global markets reel from sweeping tariffs imposed by the United States on several nations, including India. The sudden policy shift has sparked investor anxiety and triggered a sharp risk-off sentiment globally.

Tariff Impact Reverberates Across Markets

The outflows from India follow the imposition of wide-ranging tariffs by the US, which have heightened trade tensions and cast a shadow over global economic stability. 

The uncertainty has not only led to foreign capital exiting emerging markets like India but also triggered a massive sell-off in the US itself. Over just two days, the S&P 500 and Nasdaq indexes plunged more than 10%, underscoring the scale of investor panic.

Reversal After Short-Lived Buying Spree

The April outflow came on the heels of a brief period of strong buying. Between March 21 and March 28, FPIs made a net infusion of ₹30,927 crore into Indian equities. 

This helped bring down the overall net outflow for March to ₹3,973 crore. Despite this temporary reversal, the broader trend has remained negative.

In February, FPIs had already withdrawn ₹34,574 crore, following an even steeper outflow of ₹78,027 crore in January. With the latest pullback, the cumulative outflow by foreign investors from Indian equities has now reached a staggering ₹1.27 trillion so far in 2025.

Debt Segment Also Sees Withdrawals

The selling pressure wasn’t limited to equities alone. In the debt markets, FPIs pulled out ₹556 crore from the debt general limit and another ₹4,038 crore from the debt voluntary retention route. 

The continued capital flight reflects a growing caution among global investors, driven by geopolitical uncertainties and tightening financial conditions worldwide.

Conclusion 

The sharp FPI outflows signal rising global investor unease amid escalating trade tensions and volatile market conditions. 

With both equity and debt segments affected, sustained foreign capital withdrawal may continue to weigh on Indian markets. Going forward, investor sentiment will hinge on global economic developments, US policy clarity, and India’s macroeconomic resilience in navigating external shocks.

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