Foreign Investors Reallocate Funds: $2 Billion Boost to Indian Equities

Foreign Institutional Investors (FIIs) have injected over $2 billion into Indian equities within five trading sessions, marking a significant shift in investment trends. This surge follows a prolonged period of net selling, where FIIs offloaded shares worth ₹2.33 lakh crore between October 2024 and March 2025. The recent buying spree, recorded between April 15 and 21, reflects a reallocation of funds triggered by global trade tensions and tariff adjustments.

Analysts attribute this shift to broader macroeconomic factors, including the temporary suspension of tariffs by the U.S. government and the weakening of the U.S. Dollar Index. These developments have made emerging markets like India more attractive to investors seeking higher yields. Additionally, liquidity measures by the Reserve Bank of India (RBI) and attractive equity valuations have further bolstered investor confidence.

The inflows have positively impacted Indian benchmark indices, with the Sensex and Nifty witnessing gains of 9-10%, while mid-cap and small-cap indices surged by over 11%. This renewed interest in Indian markets underscores the resilience of the country’s economic fundamentals amidst global uncertainties.

Market participants are closely monitoring whether this momentum will sustain, as FIIs continue to navigate evolving trade policies and economic conditions. The recent investments highlight the strategic importance of Indian equities in the global investment landscape.