Foreign investors turned buyers for the second month in August, investing ₹30,919 crore in Indian equities. This follows July inflows of ₹20,200 crore after four months of heavy selling. Analysts say strong corporate earnings, resilient growth and a stable rupee encouraged overseas funds to return.
Despite recent inflows, net outflows in 2026 remain high at ₹2.23 trillion, compared with ₹1.66 trillion in 2025. Earlier this year, withdrawals were steep with ₹49,340 crore in June, ₹32,963 crore in May, ₹60,847 crore in April and ₹1.17 trillion in March.
Debt markets saw mixed activity. FPIs invested ₹627 crore through the fully accessible route and ₹289 crore via the voluntary retention route, but pulled out ₹2,318 crore through the general route.
Experts highlight that earnings growth and rupee stability are key drivers. Strong credit growth and resilient domestic activity also support confidence. Globally, easing geopolitical concerns and expectations of softer US interest rates helped flows.
Risks remain from crude oil volatility, elevated US bond yields and geopolitical tensions. Investors await India’s GDP and inflation data along with the US Federal Reserve’s mid‑September policy meeting.
Back‑to‑back inflows suggest a possible trend reversal, though caution continues amid global uncertainties. India’s improving fundamentals keep attracting foreign interest.
