Foreign Investors Significantly Re-enter Indian Equity Markets in April

Synopsis

In April, foreign investors have made a significant return to Indian equity markets, emerging as net buyers amidst a positive economic outlook and favorable conditions. Analysts project continued strong inflows bolstered by India's resilience in a challenging global context.

Key Takeaways

Foreign investors return as net buyers in April.
Weakening US dollar and optimism boost market.
India to grow over 6% in FY26.
FPI inflows expected to support ongoing market rally.
RBI maintains limits for foreign investments.

New Delhi, April 26 (NationPress) Foreign investors have significantly re-entered Indian equity markets this month, emerging as net purchasers over the past two weeks, analysts reported on Saturday.

In the last seven trading sessions, foreign portfolio investors (FPIs) have shown a strong positive shift towards Indian equities. This change is primarily due to a weakening US dollar, the revisitation of tariff agreements, and a renewed optimism regarding India’s economic outlook.

“Despite a challenging global landscape, characterized by sluggish growth in major economies such as the United States and China, India continues to stand out for its economic resilience,” stated Manoj Purohit, Partner and Leader, FS Tax, Tax and Regulatory Services, BDO India.

India is projected to grow at a healthy rate of over 6 percent in FY26, solidifying its position as the fastest-growing economy and an attractive destination for global investors.

“FPI inflows are anticipated to remain robust in the short term, further bolstering the ongoing market rally. As global investors reassess their strategies, India’s economic fundamentals and earnings potential position it as a beacon of stability and growth amid global turbulence,” Purohit explained.

As of April 24, FPIs have acquired equities worth Rs 22,716.43 crore while selling equities worth Rs 17,196.33 crore, resulting in a net investment of Rs 5,520.1 crore.

Last month, FPIs increased their buying in the latter half of March 2025, leading to a recovery in specific sectors. The BFSI sector led the inflows, transitioning from $380 million in selling to $2,055 million in buying, netting $1,675 million for the month.

Telecommunications and metals and mining sectors also experienced net inflows of $360 million and $219 million, respectively, as noted by a recent report from Bajaj Broking. Overall, FPI interest remained concentrated in BFSI, while most other sectors continued to experience selling pressure.

With a favorable economic outlook, ongoing policy reforms, and a resilient market, India remains a compelling destination for global capital. The government's sustained focus on infrastructure, digital growth, and improving the ease of doing business further enhances investor confidence.

The recent decision by the RBI to maintain the current corporate bond and G-sec limits unchanged for foreign portfolio investors (FPIs) underscores the government’s commitment to keeping the gateway open for offshore participants to continue their investment in the Indian market.