Key points
- The selloff has erased $1.3 trillion in market value
- The US-based funds have been hit the hardest
- A weaker Indian rupee (-4.5 pc) is adding pressure to foreign investors
ISLAMABAD: Global investors are pulling out of Indian stocks at record levels, with $15 billion in outflows this year alone. The selloff has erased $1.3 trillion in market value.
According to Firstpost, the US-based funds have been hit the hardest, with their Indian equity portfolio plunging 24 per cent since September 2024. Meanwhile, a weaker rupee (-4.5 per cent) adds pressure to foreign investors.
Year of selloffs
According to a Firstpost programme, “Vantage with Palki Sharma”, Trump’s tariffs are shaking up markets everywhere including in India. Foreign investors are pulling out billions of dollars and the month of march was particularly rough. Foreign investors withdrew over 24,000 crore INR that is more than two billion dollars in this month so far. 2025 has been a year of selloffs. Overseas investors have pulled some 15 billion dollars from Indian stocks this year.
According to Business Standard, corporate profits have also taken a hit in this environment. More than 60 per cent of companies comprising the Nifty 50 Index saw downgrades to their forward profit estimates last month.
Trump targets India
According to the Firstpost programme, Donald Trump’s tariff plan accelerated the selloffs. Trump has relentlessly attacked India on the issue of tariffs.
Last Friday, Trump said, “India charges us massive tariffs, massive. You cannot even sell anything into India. It is almost restrictive. It is restrictive. We do very little business inside. By the way, they have agreed. They want to cut their tariffs way down now, because somebody is finally exposing them for what they have done.” Trump had also earlier said that India charges US auto tariffs higher than one hundred per cent. He had said on April 2nd reciprocal tariffs will kick in.
Largest source of FPIs
According to the Firstpost, US is the largest source of Foreign Portfolios Investments (FPIs) in India. Earlier, American FPIs used to like the Indian market. About half of all FPI investment in India comes from the United States, but with stocks falling, investors are also seeing heavy losses. Their portfolios have shrunk by as much as 20 per cent all because of the market decline.
The declining Indian rupee is making matters worse. When the rupee falls, the value of FPIs falls as well. US investors’ holdings in Indian equities fall from $397 billion to $304 billion, the report mentioned.
