Foreign investors offload Rs 16,422 crore, driven by H-1B visa fees and drug tariffs

Foreign portfolio investors (FPIs) offloaded Rs 16,422 crore worth of Indian equities last week, according to data from the depositories. This was driven by concerns over valuations and new policy measures by the US government, but sentiment is set to reverse.

Analysts believe that the $100,000 fee on new H-1B visa applications and high tariffs on branded drugs have raised concerns among FPIs regarding earnings pressure in India’s IT and pharmaceutical sectors.

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HSBC Global Investment Research also highlighted that the potential impact on India’s pharma sector is unlikely to have an immediate impact on Indian exports, as the bulk of India’s contribution lies in simple generics.

Further, the depreciation of the Indian rupee, in contrast to the appreciation of other emerging market currencies, also intensified the pressure.

Notably, FPIs were sellers in the first three months of 2025, then turned buyers in the next three months. In July, August, and September so far, they have once again turned sellers.

They have net purchased debt instruments amounting to Rs 50,215 crore so far in 2025, helping reduce the total outflows for this year.

Global bond funds investing through the Fully Accessible Route (FAR) have been the largest buyers of Indian debt.

Foreign portfolio investors have pulled out Rs 1,38,580 crore from the Indian equity market and Rs 1,442 crore from REITs and InvITs so far in 2025. But their net purchase of debt has helped reduce the total outflow to Rs 88,318 crore in 2025.