Summary of this article
FPIs sell Rs 20,975 crore worth of equities in August, after July’s Rs 17,741 crore outflow.
Overall, FPIs have offloaded Rs 1.16 lakh crore from domestic equities in 2025.
DIIs absorbed FPI selling with Rs 55,795 crore buying this month
According to data from the National Securities Depository Limited (NSDL) as of August 14, foreign portfolio investors (FPIs) have net sold Rs 20,975 crore worth of Indian equities so far in August 2025, including both primary and secondary market transactions. The outflows follow net sales of Rs 17,741 crore in July. Cumulatively, in 2025, FPIs have withdrawn Rs 1.16 lakh crore from domestic equities.
The persistent selling has come amid US President Donald Trump’s announcement of 50 per cent tariffs on Indian goods and a tepid April–June quarter earnings season.
Trump’s harsh tariffs on Indian goods and strained ties between the US and India have dented market sentiment, resulting in a build-up of short positions, said Vijayakumar, Chief Investment Strategist, Geojit Investments. He added that weak earnings growth, elevated valuations, and only modest projections of 8–10 per cent earnings growth for FY26 have also encouraged bearish bets, putting further pressure on the market.
DIIs Continue To Support
Meanwhile, domestic institutional investors (DIIs) have consistently been lending support, offsetting FPI selling. DIIs have bought equities worth Rs 55,795.28 crore in August so far, including both primary and secondary markets.
However, despite DIIs absorbing all the selling by FPIs, India’s market has underperformed most global peers. Nifty 50 has slid 0.55 per cent in the month, while the US Dow Jones has advanced 1.85 per cent. Meanwhile, Europe’s Euro Stoxx 50 has gained 2.42 per cent, Germany’s DAX has jumped 3.98 per cent, and France’s CAC 40 has surged 1.95 per cent.
Japan’s Nikkei 225 has climbed the most, rising 5.62 per cent, the Hong Kong-based Hang Seng has advanced over 2 per cent, and China’s SSE Composite has risen 3.46 per cent.
FPI Flow Outlook
After Trump announced the additional 25 per cent tariffs on Indian goods over the already existing 25 per cent tariffs, FPIs have been on a selling spree. However, the future trend of FPI flows into Indian equities will depend on how the tariff issue between India and the US pans out. Vijayakumar said, “Going forward, the FII activity will be influenced by the action on the tariff front.”
He added that easing tensions between the US and Russia means the secondary tariff of 25 per cent on India may not come into effect after August 27. “Latest news of easing of tensions between the US and Russia and no further sanctions on Russia indicate that the secondary tariff of 25 per cent imposed on India is unlikely to come into effect after August 27. This is a positive,” Vijayakumar said.
Another positive factor for the market is S&P Global’s decision to upgrade India’s long-term sovereign credit rating to ‘BBB’ from ‘BBB-’. This is the first upgrade by the agency in 18 years.
S&P cited strong economic growth, better monetary policy credibility and continued fiscal consolidation as the main reasons for the upgrade. Fitch has maintained India at ‘BBB-’ since 2006, while Moody’s has kept a ‘Baa3’ rating since June 2020.
S&P also said the impact of US tariffs on India is likely to be limited, given the country’s low dependence on trade and the strength of domestic demand.
