The development comes after sustained outflows in recent times, with FPIs withdrawing Rs 23,885 crore in September, Rs 34,990 crore in August and Rs 17,700 crore in July, data from depositories show.
The renewed inflows in October mark a significant shift in sentiment and reflect new confidence among global investors towards Indian markets.
Several important factors underlie this turnaround.
According to Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, India’s macroeconomic backdrop remains relatively strong in emerging markets, with stable growth, manageable inflation and resilient domestic demand helping the country stand out.
He further noted that global liquidity conditions are gradually easing, with expectations of rate cuts or at least a pause in the US. As risk appetite returns, funds are flowing back into higher-return emerging markets. Moreover, Indian valuations, which have been under pressure, have now become more attractive, prompting renewed dip-buying interest. Echoing a similar view, Geojit Investments Chief Investment Strategist VK Vijayakumar said the main reason for this shift in strategy of FPIs is the smaller valuation gap between India and other markets.
India’s underperformance in the past year, he said, has opened up prospects for improved relative performance.
Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, pointed out that the latest inflows can also be attributed to a moderation in trade tensions between the US and India.
He noted that the selling pressure seen earlier in 2025 made Indian equities’ valuation ratios more attractive compared to global peers.
Looking ahead, experts believe that future trading developments and the ongoing earnings season will play a key role in determining the direction of FPI flows in the coming weeks.
Despite the recent inflows, FPIs have still withdrawn around Rs 1.5 lakh crore so far in 2025.
Meanwhile, in the debt market, FPIs invested around Rs 5,332 crore under the general limit and Rs 214 crore through the voluntary retention route this month (till October 17), indicating continued interest in Indian debt instruments.
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