Share Market: Domestic Investors Inject Record $72 Billion into Indian Market in 2025, Countering Foreign Outflows

Indian domestic institutional investors (DIIs) have demonstrated unprecedented confidence in the equity market, pouring in a record 6 lakh crore rupees (approximately $72 billion) in 2025, even with two and a half months remaining in the calendar year. This massive inflow has played a crucial role in shoring up the market against significant selling by foreign portfolio investors (FPIs), ensuring that benchmark indices Sensex and Nifty have registered over 5% gains year-to-date.

Record Inflows and Market Resilience

This year's DII net investment of over 6 lakh crore rupees is the highest recorded since BSE began tracking data in 2007, Notably surpassing the 5. 26 trillion rupees invested in 2024. The sustained momentum is largely attributed to solid SIP (Systematic Investment Plan) contributions. Rishi Kohli, CIO of Jio Blackrock AMC, anticipates this trend will continue, with DIIs maintaining strong investment unless a major global shock causes a 30-40% market downturn. He even suggests 2026 could potentially exceed 2025's DII investment levels.

FPI Selling and Market Dynamics

Conversely, FPIs have withdrawn a substantial $23. 3 billion (2. 03 lakh crore rupees) from Indian equity markets during calendar year 2025, as per NSDL data, while however, they also invested $5. 71 billion (49,590 crore rupees) through the primary market and other avenues, while mahesh Patil of Aditya Birla Sun Life AMC notes that FIIs have been more active in markets like the US, China, Germany, and Brazil, while booking profits from Japan, India, Vietnam, and South Korea.

Expert Insights and Future Outlook

G Chokkalingam, founder of Equinomics Research, highlights a recurring pattern since the 2008 Lehman Brothers crisis: DIIs have consistently profited by aggressively buying during market dips when FIIs engage in heavy selling. He views FII panic selling as a mistake, while DII support has proven advantageous. Sonam Udasi, Senior Fund Manager at Tata Asset Management, believes that domestic investors, primarily through mutual funds and SIPs, will continue to dominate Indian equities, providing a strong buffer against foreign capital outflows, while despite a slight dip in BSE Smallcap and Midcap indices, the overall equity market has remained solid, largely due to DIIs' record-breaking commitment.