The Indian stock market has been in consolidation mode this year, with benchmark indices — Sensex and Nifty — lagging Asian and global peers by a wide margin. Among the factors that have plagued indices this year, apart from tariff-related worries and earnings slowdown, is the sharp selling by foreign institutional investors (FIIs).
FIIs have been net sellers of Indian stocks to the tune of over ₹155,000 crore in 2025 so far, largely plagued by a weak Indian rupee, steep 50% tariffs on India by the US President Donald Trump and high valuations and slowdown in earnings.
However, some signs of a rebound are visible with FIIs turning net buyers in a week amid inflows of ₹1,346.3 crore during this period. Data for December shows that FIIs have been net buyers during three days this month so far, buying stocks between December 17-19.
Will 2026 mark strong FII inflows for India?
Going ahead, analysts remain cautiously optimistic on the FII flow trend. They expect to see some recovery, but believe it would be balanced than one-directional.
Maxwell said that if global rates begin to ease and the US dollar weakens, India could see more sustained inflows, supported by its structural growth story. However, volatility will remain, and flows may remain selective, favouring high-quality companies with earnings visibility rather than buying more broadly, he added.
