Foreign capital has poured into India: a record inflow of $1.3 billion in one week
The Indian stock market is experiencing a powerful reversal. In the week from July 5 to 9, foreign funds invested $1.3 billion in local stocks. This is the largest weekly inflow since June 2025. The signal is more than telling: global investors are once again turning towards Asia, and India is their main beneficiary.
In just one day, July 10, non-residents spent $272 million on purchasing Indian securities. For comparison, in the first half of 2026, there was a massive outflow — from January to May, foreign investors withdrew approximately $21 billion from Indian stocks. The trend has changed dramatically.
What is behind the reversal?
The key factor is the actions of the Reserve Bank of India (RBI). The regulator opened dollar/rupee forward contracts for new FCNR (B) deposits, making them more attractive to foreigners. Additionally, starting April 1, 2026, India abolished the capital gains tax for foreign portfolio investors on the sale of government bonds and income received from them. This is a direct incentive to enter the market.
Goldman Sachs analysts see the current situation as just the beginning of a cycle. According to their estimates, the share of foreign investments in Indian assets is still small, meaning the potential for increasing positions is enormous — especially against the backdrop of rupee stability and clearer yield forecasts.
"Global funds still have a large reserve for returning to Indian stocks due to significant underweight in their portfolios," the bank's report notes. Experts also forecast that the Nifty 50 index will reach 26,500 points by June 2027 — approximately 10% higher than current levels.
Expert opinion
From a macroeconomic perspective, India is currently one of the most stable markets among developing countries. The combination of tax reforms, currency stability, and a clear regulatory direction creates an ideal environment for capital inflows. If the current dynamics persist, the Indian market could become a major competitor to Chinese assets in the battle for global portfolio investments.