FPIs Turn Net Buyers in February, Invest Over ₹8,100 Crore in First Week
Foreign portfolio investors (FPIs) have turned net buyers in Indian equities in February after three straight months of heavy selling. During the first week of the month, FPIs infused more than ₹8,100 crore into domestic stocks, supported by improving global risk sentiment and optimism surrounding an interim trade framework between India and the United States.
FPI Investment Trend in February
As per depository data, FPIs invested a total of ₹8,129 crore in Indian equities till February 6. This marks a notable shift in foreign investor behaviour, following sustained outflows in the preceding months.
In comparison, FPIs had withdrawn:
- ₹35,962 crore in January
- ₹22,611 crore in December
- ₹3,765 crore in November
The renewed inflows suggest a gradual return of confidence among overseas investors after a prolonged period of caution.
2025 Saw Heavy Foreign Selling
Despite the recent turnaround, overall foreign investment sentiment remains mixed. In calendar year 2025, FPIs pulled out a net ₹1.66 lakh crore (around $18.9 billion) from Indian equities, making it one of the weakest years for foreign capital flows.
The large-scale selling was triggered by several global and domestic factors, including volatile currency movements, persistent global trade tensions, concerns over potential US tariff actions, and stretched equity valuations in the Indian market.
What Is Driving the Recent Buying?
Market experts believe the recent buying reflects an improvement in overall risk appetite and renewed confidence in India’s medium-term growth prospects. Easing global uncertainties, stability in domestic interest rate expectations, and optimism around India–US trade and policy developments have collectively supported sentiment.
This shift stands in sharp contrast to January, when FPIs exited Indian markets amid elevated US bond yields and a broader global risk-off environment.
Outlook Remains Cautiously Optimistic
While the initial inflows are encouraging, market participants remain cautious. Further FPI buying could materialise if corporate earnings continue to show resilience and global trade tensions remain under control.
However, certain challenges could cap upside potential. Persistent weakness in the rupee, relatively high market valuations, and possible shifts in US economic or trade policy may act as headwinds for sustained foreign inflows.
Key Market Triggers to Watch This Week
Analysts note that several factors will influence market sentiment in the coming week, including:
- Domestic and global inflation data
- Trading activity of foreign investors
- Global market cues and geopolitical developments
- Ongoing Q3 corporate earnings announcements
On the earnings front, companies such as Ashok Leyland, ONGC, Bajaj Electricals, and Eicher Motors are scheduled to report their quarterly results.
India–US Trade Deal Boosts Sentiment
Investor confidence has also been lifted by the announcement of an interim trade agreement framework between India and the US. Under the proposed arrangement, the US will reduce tariffs on Indian goods to 18% from the earlier 50%.
In return, India will eliminate or lower import duties on all US industrial goods and a wide range of agricultural and food products, including soybean oil, tree nuts, fresh and processed fruits, animal feed grains, wine, and spirits. The agreement is expected to support bilateral trade and improve the overall investment climate.
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