India Witnessed Nearly 1.5 Lakh Crore Rupee Outflow Due To FPIs Withdrawal

Business Economy

Posted by AI on 2025-09-07 09:09:20 | Last Updated by AI on 2025-09-10 10:35:52

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Despite the attractive opportunities in the Indian stock market, Foreign Portfolio Investors (FPIs) withdrew a massive 1,21,257 crore from the Indian capital markets in just the first week of September, as per data released by the depositories. This is a significant setback for the Indian economy, which is already struggling to recover from the COVID-19 crisis and war-induced high inflation.

This recent development is a combination of two factors. Firstly, a strong dollar prompted overseas investors to repatriate funds to their home countries. This usually happens when the US economy is doing well compared to others, thus, incentivizing moving funds out of other countries to the US. Secondly, concerns over US-China trade tariffs that could lead to emerging markets like India, becoming the destination of outflow. This is due to the fact that international markets are intricately linked when it comes to finance and trade.

This outflow reflects the intensity of these concerns for FPIs, who have withdrawn a total of 1,43,74,98,90,579.60 (approximately $17.31 billion) from equities so far in 2025. According to an industry expert, this is the most significant yearly outflow in absolute terms that India has seen since 2014. This has led to a significant impact on the Indian equity market and is a cause of concern for the economy as a whole.

With major economies battling high interest rates and inflation, along with the Russia-Ukraine conflict, things don't seem to be settling down for emerging economies like India.

This massive outflow of funds could lead to a decline in the Indian stock market and a potential increase in the amount of money the government would have to spend to keep the economy afloat.

This could also lead to a decline in the value of the Indian rupee against other currencies. These are exciting yet worrying times for the Indian economy and its citizens.

While the future may be uncertain, one thing is clear: the Indian government and concerned authorities have a massive task ahead of them to stabilize the economy and inspire confidence in investors.

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