India Sees Record Rs 94,829 Crore Inflows From DIIs In August, Offsetting FII Outflows

Last Updated:September 15, 2025, 10:53 IST

DIIs offset heavy FII outflows in India, with August marking 25 months of net DII inflows.

FIIs vs DIIs

The Domestic Institutional Investors (DIIs) provided a cushion to the massive outflow of Foreign Institutional Investors (FIIs) from India’s market in recent times. A ‘Market Pulse’ report by the National Stock Exchange mentioned that  DIIs continued to provide a counterbalance to FPI selling. It said that August marked the 25th consecutive month of net DII inflows, with purchases of Rs 94,829 crore – the highest in the last ten months.

“In the first five months of FY26, DIIs have invested a net Rs 3.24 lakh crore (US$37.6 bn), already accounting for 53% of the total net investment made during the entirety of the previous fiscal year,” the report added.

On the debt side, FPIs remained strong buyers for the second month in a row, with net inflows of US$1.4bn each in July and August, more than reversing the net outflows seen in June. Notwithstanding the recent buying, FPIs still remain net sellers in the Indian debt market in this fiscal thus far, with net outflows of US$1.2bn in the first five months of FY26.

The NSE report highlighted that after three months of net buying, FPIs turned net sellers of Indian equities in July due to rising trade tensions following the imposition of steep US tariffs, which raised concerns over growth and export competitiveness.

The selling spree intensified in August, with net outflows amounting to US$6 bn over the two-month period, more than offsetting the inflows recorded in the preceding three months, taking the net FPI outflows in the first five months of FY26 (Apr-Aug’25) to US$1.5bn.

Indian equities extended the losses in August, underperforming the broader emerging and developed market packs for yet another month. The imposition of aggressive 50% tariffs on Indian imports by the US and the consequent selling by FPIs weighed heavily on investor sentiments.

However, the NSE report added, resilience in the domestic economy—evident in Q1 GDP growth that significantly outpaced expectations, robust PMI readings, and a benign inflation trajectory—helped limit the downside.

Higher valuations in India vis a vis other markets like China, Hong Kong and South Korea have nudged FIIs to sell in India and buy in cheaper markets. This strategy has worked so far this year since these cheaper markets have hugely outperformed India in 2025 till date, explained VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited

Varun Yadav

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More

Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More