Foreign Investors Pull Out Over $1B from Indian Debt in June on Global Volatility
Foreign investors withdrew $1.06 billion from Indian government bonds in June 2025, continuing a sell-off since April amid concerns over global trade tensions, higher US yields, and shifting liquidity ahead of RBI cash reserve ratio cuts
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Foreign investors withdrew over $1.06 billion from Indian debt markets in June 2025, extending the outflow trend that began in April. Despite a brief pause in May due to a single large bond issuance, the overall momentum remained negative.
These exit movements reflect mounting global macroeconomic concerns—including trade uncertainties, slowing global growth, and more attractive yields on US bonds—which have dampened the appeal of Indian debt for short-term investors.
Most of the sell-off came via short-term investment routes, as investors looked to lock in returns and anticipated improved domestic liquidity following an RBI cash reserve ratio (CRR) cut. Still, fluctuations in the rupee and narrowing yield spreads between India and the US further reduced foreign appetite for long-term Indian bonds.
