Foreign Portfolio Investors (FPIs) made a strong comeback to Indian equity markets in July 2026, ending a four-month selling streak with net investments of around ₹20,200 crore. The renewed buying was driven by relatively attractive market valuations, improving corporate earnings, stable domestic fundamentals, and easing global uncertainties.
The July inflows marked a significant reversal after FPIs had remained net sellers for four consecutive months, withdrawing ₹49,340 crore in June, ₹32,963 crore in May, ₹60,847 crore in April, and ₹1.17 lakh crore in March, according to data from the Central Depository Services (India) Ltd. (CDSL).
Attractive Valuations and Earnings Revival Drive Buying
Market experts attributed the return of foreign investors to improving corporate earnings, reasonable valuations in large-cap stocks, and greater stability in India’s macroeconomic environment. Easing global headwinds and improved investor sentiment also supported fresh capital inflows into domestic equities.
Analysts noted that India’s resilient economic growth and improving earnings outlook have once again made the market attractive for overseas investors despite ongoing global uncertainties.
Primary Market Also Attracted Foreign Capital
According to NSDL data, the ₹20,200 crore inflow comprised investments in both the secondary and primary markets, highlighting sustained foreign participation across multiple investment avenues.
Despite July’s positive momentum, FPIs remain net sellers for the calendar year 2026, with cumulative outflows of approximately ₹2.54 lakh crore, reflecting the heavy withdrawals recorded during the first half of the year.
Outlook for Indian Markets
Market participants believe future FPI flows will depend on several factors, including the trajectory of global interest rates, geopolitical developments, corporate earnings, inflation trends, and India’s overall economic performance.
With domestic institutional investors continuing to provide strong support and corporate earnings showing improvement, analysts remain cautiously optimistic about sustained foreign participation in Indian equities.
Key Highlights
- FPIs invested ₹20,200 crore in Indian equities during July 2026.
- July marked the first month of net buying after four consecutive months of selling.
- Improved corporate earnings and attractive valuations supported investor sentiment.
- FPIs had withdrawn over ₹2.6 lakh crore during March-June 2026.
- Foreign investors remain net sellers for the calendar year despite the July recovery.
Source: CDSL, NSDL
