FIIs hit India with a $17 billion bouncer in FY25, but FY26 could be a batting pitch

Foreign investor sentiment has improved as we close FY2025, with FIIs pumping in Rs 19,000 crore in the last few days after a steep correction. A stronger rupee, cooling inflation, and favorable valuations have restored confidence. While short covering is a factor, expectations are that FII sentiment could further improve by mid-2025, driven by India’s strong economic fundamentals.