India Set to Log Record FII Outflows as Net Sale Hits Rs 1.58 Lakh Crore in 2025
Unprecedented FII Outflows in 2025
Foreign Institutional Investors (FIIs) are on track to conclude 2025 with an unprecedented exodus from Indian equities, marking the steepest net outflows in the history of the country’s capital markets. The volume of foreign selling has far surpassed primary market inflows, placing significant pressure on the Indian rupee. However, analysts foresee potential for renewed foreign investment in 2026.
– As of December 27, 2025, FIIs have offloaded equities worth Rs 22,130 crore through exchanges, accumulating total sales in 2025 to Rs 2,31,990 crore.
– Investments made via the primary market reached Rs 73,583 crore, resulting in a staggering net FII outflow of Rs 1,58,407 crore. This marks the most substantial annual net selling by FIIs since their investment journey in India began.
Analyst Insights on FII Trends
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasizes the gravity of the situation:
– “As the year 2025 draws to a close, FII selling in India is poised to set a new record in outflows. This represents the worst selling by FIIs since they commenced their investments in India.”
– He noted a stark contrast to 2024, when FIIs balanced their selling with substantial primary market investments, leading to a net inflow of Rs 427 crore. In 2025, however, net sales surged to Rs 1,58,407 crore.
Factors Driving FII Outflows
Vijayakumar attributes these historic outflows to the ongoing depreciation of the Indian rupee:
– “Sustained selling by FIIs has significantly impacted the sharp decline of the INR this year,” he stated.
– Despite the current outflow trend, he mentioned signs of a potential turnaround: “Improvements in fundamental economic indicators may entice net FII inflows in 2026. Strong GDP growth and projected enhancements in corporate earnings bode well for fostering positive FII flows next year.”
Conclusion: A Complex Financial Landscape
The historic scale of FII outflows reflects a multifaceted relationship among global capital movements, currency fluctuations, and shifting investor sentiments at the close of 2025. Even as domestic participation remains steady and economic indicators show resilience, the journey for FIIs signals a challenging and evolving investment landscape.
As we look ahead, prospects for 2026 suggest potential recovery, making it essential for stakeholders to stay informed about the dynamics influencing FII activity and the broader market trajectory.