The fear of Trump’s tax has spread across the stock markets of the whole world. The Indian stock market is also not untouched by this. FPI (foreign portfolio investors) withdrew Rs. 30927 crore from the Indian stock market between March 21 and March 28.

This clearly shows that foreign investors are losing confidence in the Indian stock market

Due to fear of Trump’s tax, FPIs withdrew Rs, 10000 crore from Indian stock market

The imposition of retaliatory tariffs by US President Donald Trump on many countries of the world has also affected the activities of foreign portfolio investors (FPIs).

Read More: India’s market cap slipped below Rs 400 lakh crore, FPI selling became the reason

According to depository data, FPIs had invested Rs 30,927 crore in the Indian markets in six trading sessions from March 21 to March 28.

Due to this inflow, their total withdrawal in the month of March has come down to Rs 3,973 crore. Earlier in February, foreign portfolio investors had withdrawn Rs 34,574 crore from Indian stocks, while in January their withdrawal was Rs 78,027 crore

The market expects RBI to cut the repo rate. If RBI cuts interest rates, then a good environment is created for investment in the market.

The market expects RBI to cut the repo rate. If RBI cuts interest rates, then a good environment is created for investment in the market.

But at present FPIs are in no mood to invest in the Indian stock market because FPIs have withdrawn Rs 1.27 lakh crore so far in 2025.

Many market analysts believe that the tariff imposed by Trump is much higher than expected. There is a risk of a global economic slowdown.

There is a danger of inflation rising in the US due to retaliatory tariffs on India and other countries, and if inflation rises, the Federal Reserve Bank may also refrain from cutting interest rates. This can have a negative impact on the US stock market.

S&P 500 and Nasdaq have fallen by 10% in the last 2 trading sessions

A full-blown trade war could have far-reaching consequences, impacting global trade and economic growth. However, the dollar index’s decline to 102 is seen as favorable for capital flows into emerging economies like India.

Apart from equities, FPIs also pulled out Rs 556 crore from the bond or debt market under the normal limit and Rs 4,038 crore through the voluntary retention route during the period under review.

With FPI selling so heavily from the Indian stock market, it is clear that the market will continue to fluctuate. Selling by FPI may continue in the future as well. To keep investors’ confidence in the market, RBI will have to reduce interest rates, and the central government will also have to take concrete steps.

Trump’s TARIFF war threatens to cause a global slowdown, as most countries in the world have threatened to impose retaliatory tariffs on the US. This will increase inflation, and central banks around the world will not be able to reduce interest rates. It remains to be seen whether the situation between Trump and the rest of the world improves or worsens.