At $18.4 Billion, FPI Equity Sales Hit New Record
Overview of FPI Equity Sales in 2025
In a surprising turn of events in the Indian equity market, foreign portfolio investors (FPIs) are set to report record equity selling in 2025, reaching an unprecedented $18.4 billion (approximately ₹1.6 lakh crore) in net sales by December 12. This figure has eclipsed the previous record of $16.5 billion (around ₹1.2 lakh crore) set in 2022. Data from the National Securities Depository Limited (NSDL) highlights this significant shift in sentiment among foreign investors towards Indian equities.
Domestic Funds Show Resilience
While FPIs are pulling back from the Indian market, domestic funds have been busier than ever. They have consistently emerged as net buyers of local equities throughout 2025, bolstering the market with investments amounting to ₹4.7 lakh crore as of December 10, 2025. This marks a slight increase from the ₹4.3 lakh crore invested in 2024. The resilience of domestic funds serves as a critical counterbalance to the outflows driven by FPIs, showcasing the strength of local investment sentiment.
The Shift in Investment Strategy
One of the notable trends in FPIs’ behavior is their shift away from the secondary market. In 2025 alone, foreign investors have offloaded an astounding $26.1 billion (approximately ₹2.3 lakh crore) in the secondary market, significantly surpassing the previous high of $19.6 billion (around ₹1.5 lakh crore) recorded in 2022. This sustained outflow reflects a strategic pivot as FPIs concentrate their efforts on the primary market, although the investments here have moderated compared to prior years. As of mid-December, FPIs have invested $7.7 billion in the primary market, a notable decrease from the record net purchases of $14.5 billion in 2024.
Long-Term Trends in FPI Investment
The retreat of FPIs from Indian equities marks a broader, worrying trend for the market. Historically, FPIs have been net sellers in the secondary market for four out of the last five years, with a singular rebound in 2023, during which they acquired equities worth $15.5 billion (₹1.3 lakh crore). This ongoing trend has had a profound impact on long-term net investment statistics. The 10-year rolling net investment has plummeted to a decade-low of $33.7 billion in 2025, compared to a peak of $113.7 billion in 2019. Furthermore, the five-year rolling data has turned negative for the first time in a decade, indicating an outflow of $10.2 billion from 2021 to 2025.
Market Implications
The current landscape reveals potential vulnerabilities within the Indian equity market as we approach the end of 2025. With foreign investors stepping back and pulling out historically significant amounts, the market needs to rely heavily on domestic participation. The significant investments made by domestic funds can help mitigate the impact of FPI outflows, but it also raises questions about market sustainability in the long term.
Given the scale of the net selling activity, market analysts and participants are urged to closely monitor conditions. Potential adjustments in policies or economic indicators could shift the sentiment of FPIs and reinstate their confidence in Indian equities.
Conclusion: Looking Ahead
As foreign portfolio investors hit a record $18.4 billion in equity sales, the implications for the Indian market are profound and complex. The resilience of domestic funds provides a crucial buffer against the outflows, but the overarching trend of declining net investments from FPIs presents challenges that will need addressing in the coming years.
Investors and market participants should remain vigilant, recognizing the importance of maintaining a balance between foreign appetite and domestic investment strength. The evolving landscape requires adaptive strategies to enhance market stability and secure future growth amidst these shifting dynamics. As 2025 draws to a close, the focus will be on how both domestic and foreign investors navigate the future trajectory of the Indian equity market.