Key Highlights

• In May 2025, foreign portfolio investors (FPIs) infused a record ₹19,860 crore into India's equity market, marking the highest monthly inflow of the year.
• The total foreign investment in Indian stock and debt markets for May reached ₹30,950 crore.

Foreign investors invested more than Rs 30,000 crore in the Indian stock and debt markets in May, citing the possibility of a bilateral trade agreement with the US, a weak US dollar, and better-than-expected domestic corporate earnings.

Foreign portfolio investors (FPIs) invested a total of Rs 30,950 crore in the Indian debt and equity markets last month, according to NSDL data. A total of Rs 19,860 crore was invested in the equity market by FPIs. Foreign investors contributed Rs 4,223 crore in April. In 2025, net foreign investment is negative at Rs 92,491 crore because of the January–March sell-off.

FPIs sold equity in the stock market for Rs 1.16 lakh crore between January and March 2025. Foreign portfolio investors made debt market investments totaling Rs 12,155 crore in May. Earlier in April, foreign investors withdrew Rs 24,384 crore from the debt market. At the same time, there has been a net foreign investment of Rs 36,648 crore in the debt market through 2025.

The Indian economy continues to perform well. The GDP growth rate of the nation rose to 7.4 percent during the fourth quarter of Fiscal Year 2024–2025 (January–March). In the third quarter of fiscal year 2025, it was 6.2 percent.

The most recent GDP data from the government indicates that the overall fiscal year 2024–2025 will see an economic growth rate of 6.5 percent. The IMF predicts that in FY 2025–2026, India's economy will be the only one in the world to grow at a rate of more than 6%. Because of US trade tariffs, the nation is growing quickly at a time when economies around the world are contracting.

The RBI's credit policy on interest rates decision on Friday will be closely watched, as any additional reduction in policy rates would keep markets in good shape in the medium term.