Foreign Investors Pull $1.9 Billion from India as Global Funds Favor Commodities and Gold
India is facing renewed pressure from foreign investors, with $1.9 billion withdrawn from India-focused funds over the past seven weeks, according to Elara Securities’ Global Liquidity Tracker. This marks the second significant wave of outflows in under a year, following the $4.4 billion exodus between October 2024 and March 2025. Large-cap funds were hit hardest, while ETFs and long-only funds also faced substantial redemptions, indicating that global money is exiting India’s equity markets despite steady domestic support through SIPs and institutional buying.
Japan, once India’s biggest foreign backer, has reversed course, pulling $1.1 billion since October 2024. The US, Luxembourg, and the UK also contributed to the outflows, with US investors leading at $1.02 billion. Analysts say these consistent withdrawals reflect growing global caution toward India’s valuations and growth outlook amid tariff concerns and broader trade uncertainties, even as domestic institutions continue to provide stability to the markets.
Meanwhile, global investors are increasingly favoring emerging market commodities and gold. EM commodity funds recorded a record $1.19 billion inflow this week, following $1.14 billion the previous week, while gold funds added another $8.4 billion after last week’s historic $16 billion inflow. The contrasting trends highlight a shift in global capital toward safe-haven and consumption-driven assets, leaving India’s equity markets under pressure despite a resilient domestic investor base.
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