Context: FPI sell-off India
Foreign Portfolio Investors (FPIs) recorded their highest-ever monthly sell-off (~₹1.1 lakh crore in March) due to global oil shocks, geopolitical tensions, and weak short-term investment triggers, reflecting fragile market sentiment.
Key Points
- ₹1,12,244 crore equity outflow → record high
- Surpassed ₹94,017 crore (Oct 2024)
- February → ₹22,615 crore inflow (trend reversal)
- Major selling: Financials, Automobiles
- Reasons: Oil volatility, Middle East tensions, weak investment narrative
- Shift towards passive investing, cautious foreign sentiment
FPI (Foreign Portfolio Investment)
Foreign Portfolio Investment refers to investment by a person resident outside India in securities such as shares, bonds, government securities, mutual funds, etc., without exercising ownership or control over the entity, and is regulated under the SEBI (Foreign Portfolio Investors) Regulations, 2019 and the FEMA (Foreign Exchange Management Act), 1999 framework.
FDI (Foreign Direct Investment)
Foreign Direct Investment refers to investment by a person resident outside India in the capital of an Indian entity with the intention of establishing a lasting interest and significant degree of influence or control (generally 10% or more equity participation), governed by the FEMA, 1999 (RBI) and DPIIT FDI Policy.
