Sitharaman Flags $33 Billion FPI Outflows As Indian Stock Markets Fall Nearly 12% This Year
Finance Minister Nirmala Sitharaman has expressed concern over sustained foreign capital outflows and high market liquidity, even as Indian equities struggle amid geopolitical uncertainty and shifting global investment trends. On the sidelines of the International Monetary Fund (IMF) and World Bank meetings in Bangkok on Friday, Sitharaman said investors could exit positions easily because of…
Finance Minister Nirmala Sitharaman expressed worry over foreign capital leaving Indian markets, even as equities face geopolitical risks. At IMF and World Bank meetings in Bangkok, she stated investors could exit positions easily due to ample liquidity, but affirmed India's sound economic fundamentals. The benchmark indices have declined nearly 12% since January, with markets yielding little over the past two years.
Sitharaman warned that sustained capital outflows pose a significant risk for 2027, noting international investors are gravitating towards AI opportunities in the US, Taiwan, and South Korea. India is working to expand rupee trade to aid nations facing foreign currency shortages, according to Sitharaman. Foreign investors withdrew over $33 billion from Indian equities this year, as per NSDL data.
While domestic institutional investors turned net buyers after 15 consecutive selling days, mutual fund inflows, systematic investment plan (SIP) contributions, and mid-cap and small-cap fund performances have provided some relief.
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