Foreign portfolio investors (FPIs) have withdrawn Rs 10,355 crore from Indian equity markets in the first four trading sessions of April (April 1–4), following tariffs imposed by the US on most nations, including India.
This comes after a net inflow of Rs 30,927 crore during the six sessions between March 21 and 28, which helped trim March’s total outflow to Rs 3,973 crore, according to data from depositories.
Earlier this year, FPIs pulled out Rs 34,574 crore in February and a massive Rs 78,027 crore in January, reflecting continued volatility in foreign investment trends.
Experts say the sudden reversal in sentiment highlights the fragile and evolving nature of global financial markets. Manoj Purohit, Partner & Leader, FS Tax at BDO India, noted that investors will now closely monitor the long-term impact of the US tariffs and upcoming monetary policy announcements from the Reserve Bank of India, with expectations building around a possible rate cut.
The cumulative FPI outflow from Indian equities has now reached Rs 1.27 lakh crore so far in 2025.
"The tariffs were much steeper than expected, triggering fears of their broader economic impact," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He pointed out that a 10% baseline tariff on all imports, a 25% levy on automobile imports, and steep reciprocal tariffs (26% on Indian goods) could fuel inflation in the US and raise the risk of stagflation.
These concerns led to heavy sell-offs in US markets, with the S&P 500 and Nasdaq tumbling over 10% in just two days.
While the threat of a full-blown trade war looms large, the sharp decline in the dollar index to 102 is seen as a positive for capital flows into emerging markets like India, Vijayakumar added.
Beyond equities, FPIs also pulled out Rs 556 crore from the debt general category and Rs 4,038 crore from the voluntary retention route.
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