US, Ireland Led the Comeback of Foreign Inflows into Indian Equities in April–May

After six months of continuous foreign outflows, India’s equity market witnessed a sharp turnaround. Between April and May 2025, India attracted over $7.5 billion in net foreign inflows, signaling renewed global investor interest.

Leads the Surge with $6.25 Billion Investment

The United States emerged as the top contributor, investing $6.25 billion into Indian markets during this two-month span. Notably, more than 95% of these inflows were directed into equities, indicating a strong appetite for Indian stocks over other asset classes.

Ireland Follows with Equities Focus, Despite Debt Outflows

Ireland ranked second, channeling over $1.27 billion into Indian markets. While it recorded a $644 million outflow from debt and hybrid instruments, Ireland’s equity investments stood at $3.45 billion, reinforcing the positive sentiment towards Indian equities.

Breakdown of Foreign Investment Data

These insights are based on net investments across equities, debt, and hybrid instruments from the top 10 global regions investing in India during April–May 2025. The sharp uptick represents a turning point after a prolonged phase of net outflows.

October 2024 to March 2025: A Period of Persistent Outflows

From October 2024 to March 2025, foreign investors had been pulling back amid global uncertainties and shifting capital allocations. This led to sustained pressure on Indian equities and a cautious market environment.

April–May 2025: A Renewed Sense of Optimism

With the tide turning in April, foreign institutional investors returned in large volumes, reflecting improved sentiment, a favorable outlook for Indian corporates, and relative economic stability. The surge in inflows marks a vote of confidence in India’s long-term growth potential.

What This Means for Indian Markets

• Boosts liquidity and market sentiment.

• Signals strong global confidence in India’s growth story.

• Reinforces equity markets as the preferred choice for foreign investors.

• Sets a positive tone for the rest of FY25, if momentum continues.

Conclusion

The robust $7.5 billion foreign inflow, primarily from the US and Ireland, is a welcome development for India’s financial markets. With a strong tilt toward equities, these investments not only strengthen the stock market but also reflect India’s growing importance on the global investment map.

Key Highlights:

• US contributed $6.25 billion with 95% in equities.

• Ireland invested $3.45 billion in equities despite debt outflows.

• Overall foreign inflow into India crossed $7.5 billion in just two months.

• Marks a sharp reversal after six months of selling pressure.

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