FPIs infuse ₹18,620 crore in domestic equities so far in May on global tailwinds and improving domestic fundamentals

Data from the depositories showed this positive momentum following a net investment of ₹4,223 crore in April, marking the first inflow in three months.

Before this, foreign portfolio investors (FPIs) had pulled out ₹3,973 crore in March, ₹34,574 crore in February, and a substantial ₹78,027 crore in January.

According to the data from the depositories, foreign portfolio investors made a net investment of ₹18,620 crore in equities this month (till May 16). The total outflow stood at ₹93,731 crore in 2025 so far.

India's equity markets witnessed a sharp resurgence in FPI activity in April. The sustained buying spree that began in mid-April continued in the current month, reflecting renewed investor confidence.

"A key catalyst was the announcement of a ceasefire between India and Pakistan, which eased regional tensions and lifted investor sentiment," said Himanshu Srivastava, Associate Director - Manager Research, Morningstar Investment.

The global risk appetite also improved after a 90-day tariff truce between the US and China, prompting foreign investors to reallocate capital toward emerging markets, with India being a key beneficiary, he added.

On the domestic front, India's strong growth outlook, accommodative monetary policy, and robust corporate earnings expectations supported the FPIs' interest.

On the other hand, FPIs withdrew ₹6,748 crore from the debt general limit and invested ₹1,193 crore in debt voluntary retention during the period under review.

Last week, SEBI released the consultation paper proposing to grant certain waivers/relaxations to FPIs investing in the Indian government bonds through the Voluntary Retention Route (VRR) and Fully Accessible Route (FAR) to provide momentum to the drying bond market.

This move comes at a critical time, as foreign investors continue to adopt a cautious outlook towards Indian bond markets, especially after the inclusion of Indian government bonds in the global bond indices. Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India, said.