Foreign Portfolio Investors (FPIs) have yanked $27.3 billion from Indian markets in 2025 – Asia’s worst (per @PriyankKharge, 900+ likes on X). Blame? Donald Trump’s October 25 claim of threatening “250% tariffs” to halt Indo-Pak conflict, denied by Delhi but rattling sentiment. As Nifty hovers at 26,000, govt scrambles with reforms – but is it too little?
Table of Contents
The Outflow Anatomy: $27B and Counting
January-September: Equity $17B out, debt $10B (NSDL). October alone: $4B net sell (NSE). Triggers: US Fed’s hawkish tone, Trump’s tariff saber (post-election buzz), and GST tweaks inflating costs. X erupted: @Political_Up (50 views) called it “trust dwindle in AmritKaal.”
Comparisons: 2022’s $20B vs. 2025’s spike – but DIIs plugged $30B gap (mutual funds). Sectors hit: IT (-$5B), banks (-$3B). Gains? Gold, up 10% as hedge (reserves cross 880 tonnes).
Govt Response: Borrowing Boost and SEBI Ease
Finance Minister Nirmala Sitharaman met states October 28, pushing Himachal’s borrowing limit up 20% to ₹10,000 crore for fiscal buffers. SEBI fast-tracks listings, eases foreign fund entry (October 24 circular). Goal: Attract $50,000 crore FDI in finance (Piyush Goyal tweet, 200+ likes).
Reactions: Markets dipped 0.6% (Sensex), but rebounded on Fed cut hopes (Asia up 0.3%). X: @smanda_2023 (20 views) on “growth-governance balance.”
Tariff Fears: Indo-US Trade at Stake
Trump’s “deal soon” quip ties trade to geopolitics – India exports $80B to US (steel/auto hit). Policies like carbon tax scrutiny (EU talks) add pressure. Fiscal deficit? 5.1% target stretched to 5.6% (Moody’s). Comparisons: China’s 4.8% GDP vs. India’s 6.6% (IMF) – but outflows cap upside.
Rebound Plays: Reforms in Motion
By late 2025, EU FTA eyed (steel/auto focus). RBI’s gold reserves (880+ tonnes) signal stability. Investors: Shift to defensives – ONGC/SAIL up 2% (TOI picks).
This bleed tests Viksit Bharat – but as Goyal says, “Oasis for investments.” Reforms or rhetoric? Q4 will tell.
Highlights
- Massive Exit: $27.3B FPI outflow, Asia-high; equity/debt split $17B/$10B on tariff jitters.
- Govt Counter: Borrowing limits up 20%, SEBI listing ease to lure $50k cr FDI.
- Market Dip, Quick Bounce: Sensex -0.6% then +1.1%; gold hedges shine amid 880T reserves.