Key Highlights

• FPIs became net buyers in October 2025 after three consecutive months of selling.

• Net inflows ranged between ₹6,000 crore and ₹14,000 crore, as per early NSDL and market data.

• Strong Q2 earnings and resilient GDP growth boosted investor confidence.

• Major buying seen in banking, capital goods, and auto stocks.

• Global cues such as easing inflation and expectations of rate cuts in 2026 supported sentiment.

The Return of Foreign Investors

After three months of continuous withdrawals, foreign portfolio investors (FPIs) made a strong comeback to Indian equities in October 2025. Early estimates suggest net inflows between ₹6,480 crore and ₹14,610 crore, according to NSDL and market data. While the final number will be confirmed soon, the shift marks a clear turnaround in investor sentiment.

Analysts attribute this renewed interest to India’s improving macroeconomic indicators and resilient corporate performance. The country’s steady GDP growth, moderate inflation, and stable currency have provided comfort to global investors. With the U.S. Federal Reserve expected to start easing rates in 2026, fund managers are gradually rebalancing towards emerging markets — and India remains at the top of that list.

A Reversal After Heavy Selling

From July to September 2025, FPIs had pulled out close to ₹1.6 lakh crore from Indian equities. The withdrawals were largely driven by rising U.S. bond yields, a stronger dollar, and geopolitical concerns that made investors risk-averse.October’s turnaround suggests renewed faith in India’s growth story, supported by its robust domestic demand and policy consistency.

Market Response

Indian equity benchmarks — Sensex and Nifty — reflected this positive momentum through October. Large-cap banking, auto, and capital goods stocks led the rally, as foreign inflows coincided with strong second-quarter earnings. Improving credit growth and signs of private-sector capex recovery further strengthened the market tone.

Domestic institutional investors also remained net buyers, helping maintain liquidity and absorb any short-term global shocks.

Outlook

The return of FPIs is a constructive sign for Indian markets as 2025 nears its close. Despite external uncertainties, India’s economic fundamentals remain strong. If the trend of inflows continues in November, it could set the stage for a sustained rally into early 2026.

With policy stability, a resilient rupee, and visible earnings growth, India continues to stand out as one of the most attractive investment destinations among emerging markets.