Foreign Investors Continue Buying Indian Shares Amid Tensions
Foreign portfolio investors (FPIs) have shown renewed confidence in Indian equities by investing ₹14,167 crore in shares till May 9, 2025, despite ongoing military tensions between India and Pakistan. This strong inflow has reduced the total FPI net outflow in 2025 to ₹98,184 crore.
During the same period, FPIs withdrew ₹3,725 crore via the debt general limit but invested ₹1,160 crore through the debt voluntary retention route. These figures indicate a mixed sentiment in the bond market, whereas equities remain attractive to foreign investors.
Experts attribute this trend to positive global cues, strong domestic fundamentals, and expectations of better macroeconomic conditions in India. Notably, FPIs had already invested ₹4,223 crore in April, marking the first monthly inflow in 2025 after three consecutive months of outflows — ₹3,973 crore in March, ₹34,574 crore in February, and ₹78,027 crore in January.
The combined equity investment of ₹18,390 crore (April + May till 9th) suggests that foreign investors are regaining trust in Indian markets. The bond segment, however, presents a mixed picture with partial withdrawals and selective investments.
Expert Insights on FPI Trends
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that macro global factors like a weakening dollar and slowing US and Chinese economies, along with India’s strong GDP growth, falling inflation, and possible rate cuts, will keep India attractive to FPIs. However, he expects minimal bond flows ahead.
He pointed out that in the 16 trading sessions ending May 8, FPIs bought equities worth ₹48,533 crore. However, after the India-Pakistan conflict escalated on May 9, they sold ₹3,798 crore worth of shares, highlighting short-term volatility due to geopolitical risks.
Morningstar Investment’s Associate Director for Manager Research, Himanshu Srivastava, added that favorable global trends, potential India-US trade deals, a weakening US dollar, a stronger rupee, and strong quarterly results from Indian companies have increased the appeal of Indian assets for foreign investors.
India Prepares for Defense and Economic Resilience
In response to rising military tensions, Indian authorities have directed private companies to boost defense production, indicating strategic readiness. Despite uncertainties, the inflow of FPI investments demonstrates India’s resilience and growing confidence among global investors in its long-term potential.