FPIs stick to India via the primary route

Despite domestic equities becoming the worst-performing among emerging markets

- Ram Sahgal & Sneha Shah

Despite domestic equities becoming the worst-performing among emerging markets in 2025, foreign portfolio investors (FPIs) have continued to invest in India through its primary markets, and the trend is expected to persist next year.

Investment bankers and money managers have attributed this trend to FPIs' conviction in the country's long-term structural growth prospects, even as the cohorts tactically reduce their cash market exposure due to a range of factors, including softer US interest rates and a slowdown in earnings growth.

While FPIs have net sold a record ₹2.34 trillion of cash or secondary market shares this calendar, following steeper valuations compared to emerging market (EM) peers amid an earnings growth pause, their purchases through the primary route at ₹73,749 crore this year have been the second-highest, only to the record ₹80,314 crore inflows in 2021. This bullishness on India is also evident historically. From 2015 to the end of 2025, FPIs have been net sellers six out of 11 times in the cash market. Their cumulative net cash sales is this period was ₹2.91 trillion.