FIIs Selling Indian Equities Due to Profit Booking: FM Nirmala Sitharaman
Finance Minister Nirmala Sitharaman on Monday sought to reassure investors amid recent heavy selling by Foreign Institutional Investors (FIIs), attributing it to profit booking rather than a fundamental shift in investment sentiment.
Speaking in Mumbai, she highlighted that the Indian economy is delivering strong investment returns, leading to FIIs booking profits.
FIIs also go out when they are in a position to book profits. The Indian market and economy today provide an environment where investments are yielding good returns,” she stated.
FIIs Selling Pressure & Market Impact
Since October 2024, FIIs have sold over ₹1.56 lakh crore worth of Indian equities.
Nearly ₹1 lakh crore of this outflow has happened in 2025 alone, contributing to market volatility.
This has led to a sharp correction in stock indices, wiping out a significant amount of investor wealth.
Why Are FIIs Selling?
Profit Booking
FIIs are selling stocks to lock in gains after a long period of growth in Indian equities.
Indian markets have outperformed many global markets, prompting some investors to realize profits.
Global Uncertainties & Capital Flight to the US
Finance Secretary Tuhin Kanta Pandey pointed out that FIIs are not shifting to other emerging markets but are returning to their home markets (primarily the US) amid global economic uncertainties.
During volatile periods, foreign investors tend to park funds in safer, developed markets.
Temporary Shift & Indian Market Resilience
Pandey hinted that FII outflows may be temporary, emphasizing that Indian markets remain resilient.
India is still the fastest-growing large economy, and the recent Union Budget includes multiple growth-focused reforms.
“We have faced global headwinds before, and we will continue to do so. But India is in a strong position to handle them,” he added.
No Government Intervention in Markets
Ajay Seth, Secretary of the Department of Economic Affairs, ruled out government intervention in stock markets.
He stated that authorities would only step in if there were clear signs of market failure, which is not the case right now.
He emphasized that equities do not depend solely on government policies and that foreign investors move funds based on global uncertainties.
India’s Trade & Tariff Policies
FM Sitharaman addressed concerns about US tariff policies, stating that India is actively working to become more investor-friendly.
Recent customs duty reforms in the 2025 Union Budget aim to attract global investments.
Over the past two years, India has implemented safeguard and anti-dumping duties to protect local industries and jobs.
Key Takeaways
FIIs are selling Indian stocks due to profit booking, not economic weakness.
₹1.56 lakh crore worth of equities sold since October 2024; ₹1 lakh crore in 2025 alone.
Global uncertainties have led FIIs to shift funds back to US markets.
India remains the fastest-growing large economy, and the market is fundamentally strong.
Government intervention in the stock market is unlikely unless a market failure occurs.
India is making policy changes to boost investor confidence, including tariff reforms.