Foreign Portfolio Investors (FPIs) have resumed their selling spree in Indian equities, with a net withdrawal of ₹12,569 crore in November 2025, reversing the brief inflow seen in October. The renewed outflows are attributed to global risk-off sentiment, weak cues from international markets, and India’s perceived underperformance in the ongoing AI-driven rally. This marks the fifth month of net selling in the calendar year, contributing to India’s lag behind other emerging markets.
According to depository data, FPIs had infused ₹14,610 crore in October, offering temporary relief after consecutive outflows of ₹23,885 crore in September, ₹34,990 crore in August, and ₹17,700 crore in July. Analysts note that hedge funds have shifted focus to markets like the US, China, South Korea, and Taiwan, which are seen as beneficiaries of the AI boom, while India is viewed as an AI underperformer.
📊 Monthly FPI Flows in 2025
| Month | Net FPI Flow (₹ crore) | Market Sentiment |
|---|---|---|
| July | -17,700 | Global tightening |
| August | -34,990 | AI rally elsewhere |
| September | -23,885 | Valuation concerns |
| October | +14,610 | Earnings optimism |
| November | -12,569 | Risk-off sentiment |
Sources: Depository data
🧠 Key Drivers Behind November’s FPI Sell-Off
- Global Risk-Off Sentiment: Rising geopolitical tensions and cautious central bank outlooks have triggered capital flight from emerging markets.
- India’s AI Underperformance: Compared to tech-driven markets, India is seen as lagging in AI adoption and monetization.
- Valuation Premium: Indian equities continue to trade at a premium, prompting profit-booking by foreign investors.
- Currency Volatility: Concerns over rupee depreciation have added to investor caution.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that “the divergence in flows is a key feature of 2025, with hedge funds selling in India while buying in AI-favored markets”.
📈 Sectoral Impact of FPI Outflows
| Sector | Impact Level | Commentary |
|---|---|---|
| IT & Tech | Low | Stable earnings, global exposure |
| Financials | Moderate | Sensitive to rate outlook and liquidity |
| FMCG | Low | Defensive play, resilient demand |
| Infrastructure | High | Dependent on capital inflows |
| Energy | Moderate | Volatile due to global commodity trends |
Domestic investors have stepped in to absorb some of the selling pressure, particularly in defensive sectors.
🗣️ Market Reactions and Expert Views
| Stakeholder | Commentary Summary |
|---|---|
| Domestic Institutions | “We remain bullish on India’s long-term story.” |
| FPIs | “Short-term risks outweigh current valuations.” |
| Retail Investors | “Volatility is high, but SIPs continue.” |
| Policy Analysts | “India must accelerate tech adoption to attract capital.” |
The sentiment remains mixed, with long-term optimism tempered by short-term caution.
📊 India vs Global Markets – YTD Performance (2025)
| Market | YTD Return (%) | FPI Flow Trend |
|---|---|---|
| India | +3% | Net outflows |
| US | +18% | Net inflows |
| China | +12% | Selective inflows |
| South Korea | +15% | AI-driven rally |
| Taiwan | +20% | Semiconductor surge |
India’s relative underperformance is seen as temporary, with potential for rebound in 2026.
📌 Conclusion
The ₹12,569 crore FPI outflow in November 2025 underscores the fragility of investor sentiment amid global uncertainty. While India’s long-term fundamentals remain strong, short-term headwinds—ranging from valuation concerns to AI lag—have prompted foreign investors to seek safer or more tech-aligned markets. Policymakers and market participants must now focus on enhancing India’s competitiveness, especially in emerging sectors, to restore investor confidence.
Disclaimer: This article is based on publicly available financial data, expert commentary, and verified market reports. It is intended for informational and editorial purposes only and does not constitute investment advice.
