FPIs extend comeback: Infuse ₹30,919 crore into Indian equities in August

Foreign portfolio investors (FPIs) continued their return to Indian equities in August, investing ₹30,919 crore during the month after turning buyers in July, as improving earnings, steady economic activity and a stable rupee helped strengthen sentiment.

According to the CDSL data, the August inflow was higher than the ₹20,200 crore invested by FPIs in July and marked the second straight month of net buying after a prolonged period of foreign fund outflows.

The shift comes after four months of sustained selling. FPIs had withdrawn ₹1.17 lakh crore from Indian equities in March, followed by ₹60,847 crore in April, ₹32,963 crore in May and ₹49,340 crore in June. They had, however, invested ₹22,615 crore in February, according to CDSL data.

Foreign investors remained net sellers so far in 2026

Despite the recent improvement, foreign investors have remained net sellers so far in 2026, withdrawing a cumulative ₹2.23 lakh crore from Indian equities. The outflow has already exceeded the ₹1.66 lakh crore withdrawn during the entire 2025.

"The important factors driving the FPI flows into India are the reversal of the chip trade, the stability in the rupee and, more importantly, the improving earnings growth in India," V K Vijayakumar, Chief Investment Strategist, Geojit Investments, told PTI.

The improving performance of Indian companies during the June quarter has also contributed to the change in investor sentiment.

A relatively supportive global environment also aided foreign flows. Easing geopolitical concerns, hopes of softer US interest rates and a shift in global capital away from heavily crowded AI and semiconductor trades in markets such as Korea and Taiwan created opportunities for increased allocations towards India.

However, uncertainty surrounding crude oil prices, West Asia tensions and elevated US bond yields could continue to influence foreign investor decisions. Investors will also watch developments around US-Iran tensions, US-Canada trade relations, US inflation data, the Federal Reserve's September policy meeting, as well as India's Q1 GDP growth and inflation numbers.

In the debt market, FPIs invested ₹627 crore through the Fully Accessible Route and ₹289 crore via the Voluntary Retention Route, while withdrawing ₹2,318 crore through the general route.