FPIs withdraw 12,257 cr in first week of September on robust greenback, U.S. tariff issues

Foreign buyers pulled out ₹12,257 crore ($1.4 billion) from Indian equities within the first week of September, weighed down by a stronger greenback, U.S. tariff issues, and chronic geopolitical tensions.

This got here following a web outflow of ₹34,990 crore in August and ₹17,700 crore in July.

With this, the entire outflow by Foreign Portfolio Investors (FPIs) in equities reached ₹1.43 lakh crore to this point in 2025, information with the depositories confirmed.

In the approaching week, FPI flows are anticipated to be pushed by U.S. Fed commentary, U.S. labour market information, RBI fee lower expectations, and its stance on rupee stability, Vaqarjaved Khan, Senior Fundamental Analyst, Angel One, mentioned.

“While near-term volatility may persist, India’s structural growth story, policy reforms, such as GST rationalisation, and expectations of an earnings revival could bring FPIs back once global uncertainties ease,” Himanshu Srivastava, Associate Director – Manager Research, Morningstar Investment, mentioned.

Market consultants imagine {that a} mixture of world and home elements triggered the most recent withdrawals.

“Multiple factors contributed to this risk-off sentiment — a stronger dollar, renewed US tariff threats, and continuing geopolitical tensions added to global uncertainty,” Mr. Srivastava mentioned.

Domestically, slowing company earnings momentum and issues over excessive valuations — Indian equities proceed to commerce at a premium to different rising markets — prompted FPIs to e-book earnings and scale back publicity, he added.

Echoing comparable views, Mr. Khan mentioned US tariff tensions, a weak rupee and world risk-off sentiment led to the selloff. The sentiment was cushioned by the rationalisation of GST charges by the federal government and wholesome first quarter GDP information of seven.8%.

VK. Vijayakumar, Chief Investment Strategist at Geojit Investments, mentioned that sustained large DII shopping for is enabling FPIs to encash at excessive valuations and take the cash to cheaper markets, resembling China, Hong Kong, and South Korea.

On the opposite hand, FPIs invested ₹1,978 crore within the debt normal restrict and withdrew ₹993 crore within the debt voluntary retention route in the course of the interval below assessment.