Foreign investors return to Indian equities with ₹31,000 crore August inflow

Foreign portfolio investors (FPIs) invested ₹30,919 crore in Indian equities during August, extending their buying momentum into a second straight month as improving corporate earnings, steady economic activity, rupee stability and easing geopolitical tensions boost investor confidence in domestic markets.

The August inflow follows ₹20,200 crore deployed in July, representing a sharp reversal from the sustained selling pressure that gripped the market in preceding months. Between March and June, foreign investors had pulled out a combined ₹1.61 lakh crore from Indian equities, with March alone witnessing a massive withdrawal of ₹1.17 lakh crore. A modest ₹22,615 crore inflow in February preceded this prolonged outflow period.

The consecutive months of buying offer the first indication of a potential trend reversal following one of the most challenging periods for FPI flows in recent years. Market analysts attribute the renewed interest to improving corporate fundamentals, sustained macroeconomic stability and reduced global uncertainties.

Despite the recent recovery, FPIs remain net sellers in Indian equities for 2026, with cumulative withdrawals of ₹2.23 lakh crore recorded so far. This outflow exceeds the ₹1.66 lakh crore net withdrawal across the entire 2025 calendar year, suggesting continued volatility in foreign investor sentiment despite the recent positive momentum.