Foreign Investors Show Strong Confidence in Indian Markets

Foreign investors have significantly boosted their investments in India's equity markets, injecting Rs 17,425 crore in the week from April 21 to April 25. This surge is attributed to favorable global conditions and robust domestic economic indicators.

Global and Domestic Factors Driving Investments

Experts point to a combination of steady performances in major global markets, expectations of a pause in US Federal Reserve rate hikes, and a stable US dollar as key factors enhancing the appeal of emerging markets like India. Additionally, easing global trade tensions have further improved investor sentiment.

On the domestic front, India's resilient economic growth, moderating inflation, and an optimistic forecast for an above-normal monsoon in 2025 have collectively strengthened market confidence, making India a magnet for foreign investments.

A Mixed Investment Picture

Despite the recent influx, the overall scenario remains mixed. Data reveals that FPIs have withdrawn Rs 5,678 crore from equities in April alone, contributing to a total outflow of Rs 1.22 lakh crore for the year 2025. Early April saw aggressive selling by FPIs, primarily due to global uncertainties surrounding US tariff policies.

What's Behind the Renewed Interest?

Two main factors explain this renewed interest, according to investment strategists. Firstly, the reversal of the sustained rise in the US dollar, which had previously favored US equities, has made emerging markets more attractive. Secondly, anticipated declines in US economic growth and corporate earnings contrast sharply with India's projected resilience and growth.