Foreign Portfolio Investors (FPIs) have made a strong comeback in Indian markets, recording inflows worth ₹19,675 crore in the first fortnight of February 2026. The rebound comes on the back of renewed optimism following the recently signed US-India trade deal, which has boosted investor confidence in India’s economic outlook.
Key Highlights
- Total Inflows: ₹19,675 crore in the first two weeks of February.
- Trigger Factor: US-India trade deal improving bilateral economic ties.
- Sectoral Impact: Strong inflows into banking, IT, and manufacturing sectors.
- Market Sentiment: Renewed optimism among global investors about India’s growth trajectory.
- Currency Stability: Rupee strengthened marginally against the US dollar.
Why FPIs Are Returning
- Trade Deal Boost: The US-India agreement has reassured investors about long-term stability.
- Economic Growth: India’s GDP growth projections remain robust.
- Policy Support: Government reforms in taxation and ease of doing business.
- Global Diversification: Investors are diversifying away from volatile markets.
Comparative Analysis: FPI Trends
| Month | FPI Inflows (₹ Crore) | Key Drivers |
|---|---|---|
| November 2025 | 12,500 | Festive demand, strong earnings |
| December 2025 | 8,300 | Global uncertainty, profit booking |
| January 2026 | -5,200 (Outflows) | US Fed rate hike concerns |
| February 2026 | 19,675 (Inflows) | US-India trade deal, stable outlook |
This comparison shows how February marked a sharp rebound after January’s outflows.
Pivot Analysis: Stakeholder Perspectives
| Stakeholder | Position on FPI Rebound | Impact |
|---|---|---|
| Government | Positive | Strengthens India’s global economic image |
| FPIs | Optimistic | Renewed confidence in Indian markets |
| Domestic Investors | Neutral/Positive | Benefit from improved liquidity |
| Corporates | Supportive | Easier access to capital |
| Regulators | Neutral | Need to monitor volatility |
The pivot analysis highlights optimism across stakeholders, with corporates and FPIs benefiting the most.
Sectoral Impact
- Banking: Strong inflows due to stable credit growth.
- IT Services: Global demand for outsourcing remains robust.
- Manufacturing: Trade deal expected to boost exports.
- Energy: Renewed interest in renewable energy projects.
Benefits of FPI Inflows
- Liquidity Boost: Enhances market depth and stability.
- Currency Support: Strengthens the rupee against global currencies.
- Capital Access: Corporates gain easier access to funds.
- Investor Confidence: Signals global trust in India’s economy.
Challenges Ahead
- Global Volatility: US Fed policy changes could impact flows.
- Geopolitical Risks: Global tensions may affect investor sentiment.
- Domestic Inflation: Rising prices could dampen growth outlook.
- Regulatory Oversight: Need for strong monitoring of foreign flows.
Broader Economic Context
India’s strong FPI inflows in February align with its broader economic growth story:
- Trade Expansion: US-India deal expected to boost exports and imports.
- Digital Economy: Rising investments in IT and fintech sectors.
- Manufacturing Push: Government’s “Make in India” initiative gaining traction.
- Global Positioning: India emerging as a preferred destination for global capital.
Conclusion
The rebound of ₹19,675 crore in FPI inflows during the first fortnight of February highlights renewed global confidence in India’s economy, driven by the US-India trade deal. With strong sectoral inflows, currency stability, and government support, India is poised to attract sustained foreign investment. However, global volatility and domestic challenges remain factors to watch.
Disclaimer
This article is intended for informational purposes only. It provides an overview of FPI inflows in February 2026 and their implications for India’s economy. It does not constitute financial or investment advice. Readers should consult certified financial advisors before making investment decisions.
