Profit-booking leading FIIs to sell; investments yielding good returns: FM

Foreign investors have been relentlessly selling domestic equities since the beginning of 2025. So far (till February 17), they have offloaded Rs 1.04 lakh crore of local shares.

Finance secretary Tuhin Kanta Pandey said foreign investors keep moving their investments depending upon where they want to park their funds. He said it was not true that these investors are moving from one emerging market to another.

The secretary said whenever there is global uncertainty, foreign investors return to their origin country, which is largely the US.

“In terms of resilience, Indian markets have held. The strength of the Indian economy will continue to grow despite global headwinds,” Pandey said.

He said the country has faced global headwinds in the past and continues to face it but it is in a strong position to handle challenges.

When asked about the tariff wars and the risk of reciprocal tariffs from the US, Sitharaman said India has been taking several measures from the last two years. “This Budget shows that there is a lot of rationalisation happening in terms of basic customs duty and their application, safeguard duties or any anti-dumping duties that we levy are also periodically reviewed. And this Budget shows that there is a major step forward in reforming India’s customs duty and that regime which governs it”

“We are building to be an investor friendly country and as a result, the duty cuts and the rationalisation that has been announced is a continuing process and we shall keep doing that,” she said.

To a query on how the government was attempting to manage spill overs of rising inflation due to geopolitical pressures and tariffs wars around the globe, the finance minister said the inflation is being monitored regularly, both from the supply side and from the monetary side by the RBI.

She said inflation has been well within a certain band, and the last print showed that it has come down, very close to 4 per cent.

Consumer price index (CPI) eased to a five-month low of 4.31 per cent in January from 5.22 per cent in December.

“That is one of the reasons why the RBI has chosen to cut the interest rate after nearly 5 years. So inflation related management of supplies and also the monetary policy are working in sink and that is going on in order to favour the growth cycle,” she said.

Earlier this month, the RBI reduced the repo rate – the key policy rate – by 25 basis points (bps) to 6.25 per cent, after keeping it at 6.5 per cent for almost five years. One basis point (bps) is one-hundredth of a percentage point.