FPI inflows into Indian debt fall sharply in 2025 despite rule relaxations

Foreign portfolio investors have put only Rs 69,073 crore or $7.8 billion into Indian debt markets in 2025.

This is a sharp drop from the Rs 152,775 crore FPI inflows seen in 2024.

These figures were reported using data from the National Securities Depository Limited.

There were hopes that $20-25 billion would enter markets in 2025 through the Fully Accessible Route. The FAR programme by the Reserve Bank of India allows non-residents to invest in select Indian government bonds without ceilings and with minimal restrictions.

Of the total debt investment so far this year, Rs 66,528 crore came through FAR. Only Rs 12,083 crore came in through the debt general category. The Voluntary Retention Route saw an outflow of Rs 9,538 crore.

India has seen nearly $17 billion in foreign outflows this year. It also said the country may ease rules in its $260 billion financial sector within six to 12 months.

At the same time, Business Standard reported that after three months of withdrawals, foreign investors have turned net buyers again. They invested Rs 14,610 crore in October, supported by stable corporate earnings, a US Federal Reserve rate cut, and expectations of US-India trade talks.