Now Reading: India-focused fund outflows slow in July, ETFs provide cushion
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India-focused fund outflows slow in July, ETFs provide cushion
India-focused foreign funds saw their outflows moderate in July 2026, with exchange traded funds (ETFs) helping to offset some of the selling, according to Elara Capital. Long-only funds remained persistent sellers, though…
The Story in Brief
India-focused foreign funds saw their outflows moderate in July 2026, with exchange traded funds (ETFs) helping to offset some of the selling, according to Elara Capital. Long-only funds remained persistent sellers, though the pace slowed.
Net inflows from these funds have dropped from under $20 billion in July 2025 to less than $9 billion. Nearly 65% of the cumulative inflows received during 2023-24 have been withdrawn. Japan and Luxembourg have withdrawn 50-60% of their capital since 2022-24. Total FPI outflows stand at Rs 2.4 lakh crore, contributing to a 6% fall in the Nifty. Domestic investors have cushioned the impact.
The Indian Opinion
The steady outflow of foreign funds has fed a narrative of India losing its appeal, but the story is more nuanced. The moderation in selling, combined with continued domestic buying, suggests the market is not facing a crisis. The real question is whether foreign long-only funds will resume buying once valuations adjust, or if structural factors are driving them away. The number to watch is the $9 billion net inflow level: if that stabilises, the worst may be over.
Source: thehindu.com
This story was synthesised by AI from the source linked above.
