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News Topical, Digital Desk : In August 2025, foreign investors (FPIs) withdrew Rs 34993 crore (about $4 billion) from the Indian stock markets, which is the biggest sell-off in the last six months. The 50 percent tariff imposed by the US on Indian exports and high-domestic valuation are believed to be the reason behind this sell-off by foreign investors. Last month in July, FPIs sold Rs 17741 crore, which was almost double this time. With this, the total sell-off by FPIs so far in 2025 has reached Rs 1.3 lakh crore. Experts believe that global and domestic factors are behind this sell-off.
According to a PTI report, Himanshu Srivastava, associate director at Morningstar Investment, said, "The announcement of tariffs of up to 50 per cent on Indian exports by the US had a major impact on investor sentiment, raising concerns about India's trade competitiveness and growth outlook." He further said, "Also, the June quarter results of some key sectors were below expectations, which further reduced investor interest."
Valuations in India are higher than other markets. VK Vijayakumar, chief investment strategist at Geojit Investments, says that the simple reason for this massive sell-off is that valuations in India are higher than other markets, due to which FPIs are moving money towards cheaper markets. FPIs have been buyers in the primary market for a long time. Despite heavy selling through the exchanges this year, they bought shares worth Rs 40305 crore in the primary market, where IPO valuations are reasonable. During this period, FPIs invested Rs 6,766 crore in Debt General Limit and withdrew Rs 872 crore from Debt Voluntary Retention Route.
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