The broader stock market has seen volatility as financial institutions shift their allocations to global peers that have outperformed India in recent months. Nevertheless, domestic inflows and IPO participation have supported underlying market activity. The pattern of foreign flows underlines a difference between long-term structural investments and short-term repositioning within global portfolios.According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, “FII selling accelerated in the last few days of the week, and the total FII sales figure for November through November 14 stood at Rs 13,925 crores.” He added that despite the secondary market sales, long-term allocations through public offers continue: “The long-term trend of FII purchases/investments through the primary market continues with an investment of Rs 7,833 crores so far in November.”
Sharing further details from NSDL, he noted, “For 2025, the total FII sales figure through exchanges is Rs 2,08,126 crores. And the total primary market buying figure is Rs 62125 crores.”
Vijayakumar also pointed to India’s relative performance against global markets as a driving force behind the rotation of FII flows. He explained: “India’s underperformance relative to other markets has accelerated the momentum of sales trading in India and buying trades in other markets, especially those of the US, China, Taiwan and South Korea, which are widely seen as the beneficiaries of the ongoing AI trade.” The flows are from Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India. Commenting on the recent trends, he said, “Foreign inflows have witnessed continued volatility, with some sign of recovery in the near future. Key factors contributing to this positive shift include record domestic sales during this festive month, continued growth in corporate profits and ongoing talks on trade deals between India and the US.”
He also highlighted the role of regulators and stated, “Regulators also play a crucial role in ensuring that the concerns of the offshore investors association on easing regulatory parameters and compliance burdens are met to facilitate access to the Indian market and deepen market participation.”
Purohit outlined several SEBI proposals aimed at streamlining investor processes, noting that “SEBI’s key announcements include aligning KYC assessment timelines with RBI norms, eliminating the need for trading and demat accounts, and removing requirements to provide investor group data for certain categories.” Measures such as expanding anchor investor limits and allowing IFSC-based retail schemes to register as FPIs were also identified as important steps.
He further added that SEBI’s new one-stop digital platform could play a meaningful role in improving market accessibility, saying, “Further, SEBI has also recently launched a single-window digital platform – ‘India Market Access’ for providing all required information about the Indian market and regulations to the international institutions that consider the Indian capital market as a preferred destination for making portfolio investments.” According to him, these changes are intended to “reduce administrative burden, encourage greater participation and align Indian regulations with global best practices.”
As global themes, macroeconomic shifts and regulatory developments shape foreign flows, analysts suggest that tracking FII positioning will remain crucial for understanding near-term market dynamics.
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(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
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