US Tariffs Trigger India Capital Outflow

Foreign Portfolio Investors (FPIs) have withdrawn a substantial ₹31,575 crore from India's equity markets in April 2025, bringing the total outflow for the year to ₹1.48 lakh crore. This exodus is primarily attributed to the turbulence caused by sweeping tariffs imposed by the United States under President Donald Trump on various nations, including India. The tariffs, which include a 10% baseline, 25% on automobile imports, and 26% on India, have triggered concerns about their broader economic impact, potentially leading to higher inflation and stagflation in the United States. The uncertainty has also caused significant selling in the United States markets, with the S&P 500 and Nasdaq-100 losing over 10% in just two days. Analysts from Geojit Financial Services and Meritz Securities acknowledge the short-term volatility but maintain a long-term bullish stance on India's strong macro fundamentals and domestic demand. The State Bank of India's upcoming monetary policy announcements are also being closely monitored by market participants.