The year 2025 witnessed a significant amount of foreign institutional investor (FII) selling in India, with FIIs selling equity worth Rs 30,332 crore in December alone. This brought the total FII selling through exchanges in 2025 to Rs 240,193 crore. However, analysts predict a turnaround in 2026, with expectations of net FII inflows due to improvements in the country’s fundamentals.
In contrast to the heavy FII selling, FIIs have invested Rs 73,909 crore in equity through the primary market in 2025, resulting in a total net sell figure of Rs 166,283 crore for the year, as per NSDL data. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd., highlighted that 2025 marked the worst FII selling in India’s history, attributing it to relatively high valuations in the country and the ‘AI trade’.
Despite the challenges faced in 2025, analysts are optimistic about 2026, anticipating positive FII flows. Factors such as robust GDP growth and the potential for improved corporate earnings in 2026 are expected to drive this shift in FII strategy. Meanwhile, domestic institutional investors (DIIs) played a crucial role in offsetting FII outflows in 2025, with reports indicating strong DII inflows surpassing previous years.
