Key Points

This marks the first month of negative investment by FPIs after three consecutive months of positive inflows during April, May, and June.

The sharp reversal in sentiment was driven by a sudden surge in selling during the last week of July. Between 28 July and 1 August, foreign investors pulled out Rs 17,390.6 crore from Indian equities, which significantly impacted the overall monthly numbers and pushed July's investment into negative territory.

The recent selling pressure is largely due to the fresh reciprocal tariffs imposed by the United States, which has impacted India among several other countries.

These tariffs have raised concerns over global trade stability and investor sentiment, prompting FPIs to reassess their exposure in markets.

The data also highlighted that May saw the highest FPI inflows so far in 2025, while January witnessed the largest sell-off, with net selling of Rs -78,027 crore.

With the recent selling in July, the total net outflow by FPIs in the calendar year 2025 has now crossed Rs -1,01,795 crore.

The reversal in FPI trend raises concerns for the Indian equity market, which had been witnessing strong support from foreign investors in the previous months.

However, the global economic developments like reciprocal tariffs by US President Trump and geopolitical tensions between US and Russia will continue to influence FPI behavior in the coming weeks.

In the previous month of June, FPIs had made a net investment of Rs 14,590 crore in the Indian equity segment. In May, foreign investors poured in Rs 19,860 crore, making it the best-performing month of the year so far in terms of FPI inflows.

However, earlier this year, FPIs had pulled out significant amounts from Indian equities. They sold stocks worth Rs 3,973 crore in March, while in January and February, they offloaded equities worth Rs 78,027 crore and Rs 34,574 crore, respectively.

- ANI