FII Selling: In the month of December, foreign portfolio investors (FPIs) have once again started withdrawing money from the Indian stock market. FPIs have sold Indian shares worth about ₹18,000 crore in the first nine trading sessions of the month. Despite this, it did not have much impact on the benchmark indices, because domestic institutional investors (DIIs) have completely balanced this selling. According to data, DIIs have bought shares worth almost double the amount sold by FPIs during this period.
According to the latest data of NSDL, FPIs withdrew Rs 17,955 crore from the domestic stock market in the first nine trading days of December. During the same period, DIIs, including mutual funds, bought shares worth Rs 36,101 crore. With this, the total investment of DIIs has increased to a record ₹7.44 lakh crore in 2025, which shows the strong participation of domestic investors.
According to experts, the biggest reason behind the latest selling by FPIs is the sharp fall in the Indian rupee. So far in the year 2025, the rupee has weakened by about 6 percent against the US dollar and has slipped to the level of 90.56. This fall is making the rupee the weakest performing currency among Asian currencies.
A major reason for the pressure on the rupee is the heavy tariffs imposed by America on Indian goods. Tariffs of up to 50 percent on Indian goods have affected exports, especially in a big market like America. The weak rupee directly reduces dollar returns for foreign investors and increases risk sentiment, leading to FPIs pulling out capital in search of safe and stable returns.
After US President Donald Trump announced global tariffs in April, India was among the first major markets to see a rapid recovery. At that time many global investors saw India as a safe haven amid trade tensions. However, while many countries have signed agreements with the US, India is still in talks with the White House for a favorable trade agreement, leading to uncertainty.
NSDL data also indicates that 2025 could prove to be the worst year for FPIs to sell in the Indian stock market. So far in the current year, FPIs have withdrawn a net Rs 1.61 lakh crore from the Indian stock market. In the last 11 months, FPIs have been net buyers only in three months – April, May and October, while they have been sellers in the remaining months.
In contrast, domestic institutional investors have strongly supported the market throughout the year. In January, DIIs made aggressive purchases and invested ₹86,591 crore. Investment continued in the following months as well, although there was a slight slowdown in March and April. May and June again witnessed a boom, with investments worth ₹67,642 crore and ₹72,673 crore respectively. During this period, a large number of block deals also strengthened DII investment.
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