Why Are Foreign Investors Selling Indian Equities Despite Strong Domestic Growth And Reforms?

In an exclusive chat with Business Today TV, Kotak AMC MD Nilesh Shah explained the recent surge in FPI selling. He attributed the outflows to profit booking, stretched valuations versus peers, and portfolio switches from old-economy firms like banks and commodities into new-economy IPOs. Shah added that US-led tariffs and persistent negative global coverage of India, including its Russian oil imports, have also influenced sentiment. Despite this, FPIs remain active in primary markets even as they pare secondary holdings. Overall, multiple factors combined have driven foreign portfolio investors’ cautious approach toward Indian equities.