Daijiworld Media Network – New Delhi

New Delhi, Oct 5: Foreign Portfolio Investors (FPIs) remained net sellers of Indian equities in September, withdrawing Rs 23,885 crore, taking the year-to-date outflow to Rs 1.58 lakh crore, according to depository data reported by PTI. This marks the third consecutive month of net outflows, following Rs 34,990 crore in August and Rs 17,700 crore in July.

Analysts attribute the recent sell-off to a combination of unexpected US trade measures and policy moves, including steep tariff hikes of up to 50% on Indian exports and a one-time $100,000 fee for H-1B visa applications, which have dampened investor sentiment, particularly in export-driven sectors like IT, said Himanshu Srivastava, Principal Analyst at Morningstar Investment Research India.

The Indian rupee plunged to a record low of Rs 88.80 per US dollar on September 30, adding to pressures amid domestic and global headwinds. In response, the Reserve Bank of India announced measures to promote internationalisation of the rupee, including allowing foreign investments from rupee vostro accounts in corporate bonds.

Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, noted that valuations have become more reasonable, and factors such as GST cuts and pro-growth monetary policy could help rekindle foreign interest. He highlighted that India remains the fastest-growing major economy globally, and the upcoming earnings season and macroeconomic data will be crucial for FPI flows.

Himanshu Srivastava added that a sustained rebound in foreign investments will depend on clarity on trade tariffs, stabilisation of the rupee, improved corporate earnings visibility, and a globally supportive interest rate environment. If these conditions align, India's strong structural growth narrative could once again attract foreign investors selectively.