Foreign investors resume India buying spree with ₹31,000 crore August inflows

Foreign portfolio investors (FPIs) have returned as net buyers in Indian equity and debt markets, investing ₹30,919 crore during August, data showed. The monthly inflow represents a continuation of the positive momentum from July, when FPIs had deployed ₹20,200 crore into the Indian financial system.

The renewed appetite for Indian assets signals a shift in sentiment after a challenging period that saw four consecutive months of heavy selling by foreign investors. The turnaround comes amid stabilising macroeconomic conditions and potential interest rate adjustments by central banks globally, which have improved the relative attractiveness of emerging market investments.

Analysts attribute the revival in FPI flows to improving valuations in the Indian market following the earlier correction and sustained confidence in the country's long-term economic growth prospects. The consistent inflows over the past two months suggest that foreign investors are reassessing their India exposure after the earlier selling pressure.

The return of FPI capital is significant for Indian equity markets, which have been sensitive to foreign investor flows given their substantial presence in trading volumes and their influence on liquidity conditions.