Why FIIs Are Exiting India And What Could Trigger Their Return

Foreign Institutional Investors (FIIs) have switched back to heavy selling, with nearly ₹6,000 crore sold in just the last three sessions. Market Expert Ajay Bagga says a 5% fall in the rupee this year has hurt sentiment and made Indian markets less attractive for global investors. Global flows are currently moving towards cheaper markets like China, Korea, Taiwan and Japan, especially driven by pure-play AI stocks. Analysts believe FIIs will return sustainably only when three key conditions align — rupee stability, improving corporate earnings, and more reasonable market valuations. While retail investors continue to support Indian markets, the next big trigger for foreign flows will depend on currency stability and earnings recovery in the coming quarters.