Foreign Fund Outflows Not a Concern as India Maintains Investor Confidence: Sebi Chief

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Last Updated: 10th October 2025 - 02:00 pm

1 min read

Foreign portfolio outflows from India’s equity markets are not a cause for alarm, according to Sebi Chairman Tuhin Kanta Pandey. In an interview with the Times of India, Pandey emphasised that while short-term fluctuations occur due to global conditions, the long-term trend in assets under custody of FPIs remains robust. Over the past decade, FPI assets have grown from $827 billion to around $907 billion, reflecting a 12% CAGR.

Foreign Fund Outflows Under Control

Pandey emphasised that MSCI India continuously outperforms the majority of emerging markets over spans of six, ten, and fifteen years, demonstrating the continued strength of India's investment story. Investors have been experiencing withdrawals for the previous two years, but he assured them that these are controllable and do not indicate structural problems. He pointed out that FPIs take into account a number of variables, such as price-to-earnings ratios in comparison to peers and the state of affairs in other emerging markets like China, Hong Kong, Taiwan, and Korea.

Sebi’s Efforts to Strengthen Markets

Beyond market flows, Sebi is actively working to deepen Indian markets by exploring new derivative products, including metals and corporate bonds. The regulator is also committed to protecting investors from cyber fraud, reworking the penalty framework for brokers, and retaining quarterly results reporting.

Long-Term Investor Confidence Remains Strong

In the face of shifting global capital movements, Pandey's remarks highlight Sebi's proactive approach to preserving market stability and enhancing investor confidence.

Conclusion

Even while outflows of foreign funds are still erratic, India is nevertheless a popular destination for long-term capital due to its solid market fundamentals and steady regulatory support, which maintain investor trust.

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