FPIs Turn Net Buyers in Indian Markets in July

Foreign portfolio investors (FPIs) became net buyers of Indian equities in July 2026, infusing Rs 15,157 crore into the market. This marks a notable shift after a sustained period of selling earlier in the year and signals renewed foreign interest in Indian stocks during the month.

The return of FPI buying comes after global funds had been reducing exposure to Indian equities for several months. The July inflows stand out against this backdrop and indicate a change in direction for cross-border portfolio flows into the domestic stock market.

Before July’s reversal, FPIs registered substantial net equity outflows in each of the preceding four months of 2026. Net withdrawals amounted to Rs 1.17 lakh crore in March, Rs 60,847 crore in April, Rs 32,963 crore in May and Rs 49,340 crore in June.

These consecutive outflows underscore the scale of foreign selling pressure that had weighed on Indian equities over much of the year. The cumulative effect left overseas investors significantly reducing their exposure to the market prior to the July turnaround.

Despite the positive shift in July, FPIs remained net sellers of Indian equities on a year-to-date basis in 2026. Cumulative net outflows from the asset class stood at about Rs 2.6 trillion so far this year.

The combination of heavy withdrawals in earlier months and the more recent buying means that, while sentiment has improved, foreign ownership in Indian equities is still lower than at the start of the year. July’s inflows therefore represent a partial offset rather than a full reversal of prior selling.

In addition to equities, FPIs increased their exposure to Indian debt markets in July 2026. Investments via the Fully Accessible Route (FAR) reached Rs 6,625 crore, while a further Rs 3,228 crore was deployed through the general route, taking total debt inflows for the month to Rs 9,853 crore.

The parallel rise in debt and equity investments indicates broader foreign participation across Indian financial markets during July. The use of both FAR and general channels highlights continuing interest in rupee-denominated fixed-income assets alongside equities.

Reports linked the July FPI buying to improving domestic macroeconomic conditions, including better growth indicators and a supportive policy backdrop. A relatively stable rupee was also cited as helping to contain currency risk for overseas investors.

Stronger global risk sentiment was another factor associated with the renewed appetite for Indian assets. Together, these conditions provided a more favorable environment for foreign capital flows into both Indian equities and debt during the month.