Foreign investors withdraw Rs 10,355 crore from Indian equity markets amid US tariff concerns

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Foreign investors withdraw Rs 10,355 crore from Indian equity markets amid US tariff concerns
Representative image (IANS)

Foreign investors have pulled out Rs 10,355 crore from India’s equity markets over the last four trading sessions, following the imposition of sweeping tariffs by the United States on most nations, including India.
This outflow occurred after a net investment of Rs 30,927 crore in the six trading sessions from March 21 to March 28, which had helped reduce the overall outflow for March to Rs 3,973 crore, as per data from depositories, as per PTI report.
In comparison, foreign portfolio investors (FPIs) withdrew Rs 34,574 crore in February and a higher amount of Rs 78,027 crore in January. This shift in investor sentiment underscores the ongoing volatility and the changing dynamics of global financial markets.
The recent wave of FPI withdrawals highlights the uncertainty surrounding global trade, exacerbated by the US’s decision to implement heavy tariffs. The US has imposed a 10% baseline tariff on all imports, along with a 25% tariff on automobile imports, and steep reciprocal tariffs of 26% on countries like India. These measures have raised concerns about their potential to cause higher inflation in the US and even push the country’s economy toward stagflation, a combination of stagnation and inflation.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, explained that the broader economic impact of the tariffs could be severe, particularly with the sharp sell-off seen in the US markets. The S&P 500 and Nasdaq lost over 10% in just two days, as investors reacted to the uncertainty surrounding the tariffs.
“The potential for a full-blown trade war could have far-reaching consequences, affecting global trade and economic growth,” he said. However, the decline in the dollar index to 102 could prove favorable for capital flows into emerging markets like India.
Market participants will closely monitor the long-term effects of the proposed tariffs and upcoming announcements from the Reserve Bank of India (RBI) regarding its monetary policy stance. With expectations of a potential rate cut, these developments will play a crucial role in shaping investment strategies for the coming period, according to Manoj Purohit, Partner & Leader, FS Tax, Tax & Regulatory Services, BDO India.
In addition to the equity market outflows, FPIs also withdrew Rs 556 crore from the debt general limit and Rs 4,038 crore from the debt voluntary retention route during the period.
As of April 4, the total outflow by FPIs from Indian markets in 2025 has reached Rs 1.27 lakh crore, reflecting heightened global uncertainties and investor caution.



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