Profit booking leading FIIs to sell Indian equities: FM
Mumbai, Feb 17: Seeking to assuage concerns over foreign institutional investors (FII) selling Indian equities lately, Finance Minister Nirmala Sitharaman on Monday attributed the action to profit booking.
Speaking to reporters in the financial capital, Sitharaman said the Indian economy is one where the investors are bagging better returns which leads to profit booking.
"FIIs also go out when they are able to or in a position to book profits. Indian market today, Indian economy today, has an environment in which investments are also yielding good returns and profit booking is also happening," she said.
It can be noted that FIIs have sold over Rs 1.56 lakh crore of stocks since October last year, including nearly Rs 1 lakh crore in 2025 itself, which has led to a sharp correction on the indices and wiping out investor wealth.
Finance Secretary Tuhin Kanta Pandey said FIIs are not moving from one emerging market to other, and added that in times of global uncertainties like the one being witnessed right now, they tend to go back to the country of origin, which is mostly the US.
He also hinted that these shifts may be temporary, and added that Indian markets are resilient.
Explaining that apart from demand-supply issues, growth prospects also influence investor behavior, Pandey said India remains the fastest growing large economy and added that the recently announced Budget has a slew of growth-oriented measures.
"We have faced global headwinds in the past, and will continue to face them. But I think India is in a strong position to handle it," he added.
Ajay Seth, Secretary of the Department of Economic Affairs, dismissed any idea of a government interference in te market because of the heavy sell-offs, stating that such a move can be carried out only if there is any evidence of market failure, which is not the case at present.
Seth said equities do not function on government policies alone, and added that foreign investors go to developed or bigger markets in periods of uncertainties.
He said that while India has shown resilience when it comes to world events in parts, it is not fully de-coupled either.
To a question on the US posturing on tariffs, Sitharaman said India is working towards becoming more investor friendly and pointed to recent budget announcements on reforms in customs duties.
