In a surprising twist to April’s otherwise cautious financial narrative, foreign portfolio investors (FPIs) turned net buyers this past week, infusing a robust ₹8,500 crore into Indian equities—even as the trading week was shortened due to holidays. According to data from the National Securities Depository Limited (NSDL), this bullish move arrived amid a backdrop of global economic jitters and a weakening US dollar.
While markets were operational only on Tuesday, Wednesday, and Thursday due to closures on Monday and Friday, the inflow defied expectations and helped end the week on a positive note.
But what triggered this sudden return of foreign capital?
A Weaker Dollar, A Stronger Rupee
At the heart of this reversal lies the declining strength of the US dollar. As the greenback softens, emerging market currencies like the Indian rupee gain ground. This relative strength makes India a more appealing destination for global investors looking to diversify or relocate funds from the U.S.
Aashish P Sommaiyaa, Executive Director & CEO of WhiteOak Capital, offered a sharp take on the situation. Speaking to ANI, he explained,
“The positive fallout of the USA tariff scenario and impending global slowdown is twofold—one, it comes with declining dollar and relative strengthening of emerging market currencies like rupee—which makes it easier for FPIs to allocate money out of USA into markets like India.”
He added,
“Further, it gives RBI leeway to run easier monetary and credit conditions. Also given the global economic scenario with China and USA both heading for slowdown in any case, domestic-oriented markets like India will attract more flows.”
A Ray of Optimism in a Cloudy April
Despite this week’s influx, it’s worth noting that the broader FPI trend for April remains in the red. So far, foreign investors have pulled out a net ₹23,103 crore from Indian equities. The picture for 2025 doesn’t look much brighter either—net outflows this year stand at a staggering ₹1,39,677 crore.
But this ₹8,500 crore injection could be a turning point, offering the markets a much-needed breather and a sign that investors may be ready to rethink their outlook on Indian equities.
What Lies Ahead?
For now, this inflow paints a picture of cautious optimism. The coming weeks will be crucial in determining whether this is the start of a sustained recovery in foreign investment or merely a temporary spike caused by currency dynamics and tactical allocation.
In a world that’s still adjusting to economic shifts, wars, and policy pivots, India’s resilience—and the rupee’s recent strength—might just prove to be more than a passing phase on the FPI radar.
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Investor takeaway: Stay tuned. The tides might be turning, and in the dance of global capital, India’s rhythm is picking up pace once again.
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