Foreign institutional investors are starting to show renewed interest in Indian markets as thor U.S. flow loses steam and focus shifts on emerging markets, according to data in a report by Elara Capital released December 5.
Foreign fund inflow into Indian equities was at a six month high of $414 million as of this week, mostly led by the global interest in emerging economies. Just 15% of this, that is $63 million pertains to inflows from India focussed funds. The rest is emerging market funds that allocated in India among other markets, according to the report.
The U.S. equity fund flows were at a three month low to $1.7 billion. After the U.S. announced tariffs, global funds are reducing U.S. exposures and moving to emerging economies. China, Korea, Taiwan,and Brazil dominate this inflow. India too took the advantage of it. However, all of inflows into Indian equities came in through exchange traded funds, which are passive funds, that track the exchange. Active funds continued to show an outflow of $46 million dollars. The pace at which the India-focussed funds redeem has reduced, the report found.
While the revival is may be good news for the Indian equity markets, foreign funds have pulled more than ₹1.5 lakh crore as of December 5.
Published – December 05, 2025 08:55 pm IST
