Foreign investors have pulled over $60 billion out of Indian equities since October 2024, making it tougher for domestic bulls to make money. Mutual funds, led by SIPs, have absorbed much of the shock, with monthly inflows holding firm close to ₹31,000 crore. Now a pointed debate has broken out: are India's 6.3 crore retail SIP investors effectively bankrolling FII exits, handing foreign funds a clean escape hatch with domestic money?
When FIIs sell and domestic funds buy, the net effect is a transfer of equity ownership with domestic investors indirectly absorbing institutional exits. Some market participants have framed this as retail investors being left holding the bag while sophisticated foreign money rotates out to hunt for new winners in America, Taiwan and Korea.
