FPIs Pump In Record ₹53,300 Crore In Debt, Offset Equity Outflows In June 2026

Foreign Institutional Investors (FII) have made a record bet on Indian debt this month, channelling ₹53,363 crore into debt securities in June 2026.

This nearly matched the amount pulled out of equities, resulting in an overall net inflow of around ₹334 crore for the month, the first positive month for FII flows so far this calendar year, according to National Securities Depository Limited (NSDL) data.

Where The Debt Money Went

Most of this debt investment landed in instruments tied to government securities.

The General Limit category saw inflows of ₹28,196 crore, a sharp turnaround from an outflow of ₹100 crore the previous month. The Fully Accessible Route, or FAR, category recorded inflows of ₹21,788 crore, roughly five times higher than the previous month's figure. Together, these two categories accounted for the bulk of the record debt inflow.

What Triggered The Shift

The timing lines up closely with recent policy changes. The Union Ministry of Finance had exempted government securities from long-term capital gains tax and extended the tenors of bonds available under the FAR category, both moves explicitly aimed at deepening India's bond markets and attracting more foreign capital. The scale of the inflow suggests these changes have had an immediate and meaningful effect on investor behaviour.

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Equities Tell A Different Story

The picture in equities remained considerably weaker. June marked the fourth consecutive month of equity outflows, with foreign investors pulling out ₹51,456 crore from Indian stocks during the month. Over the last six months, equity outflows have reached ₹2.76 lakh crore, a large number that indicates that the foreign investor caution towards Indian equities continues, mainly because of high valuations and rupee depreciation.

There were signs that the pace of selling was slowing down in the second half of June. Equity outflows slowed down as the rupee strengthened on the back of increased clarity on the US-Iran issue. This suggests that improving global conditions, separate from the domestic tax policy changes, also played a role in slowing the pace of equity selling towards month-end.

Taken together, the record debt inflow and the slowing equity outflow combined to push overall FII flows into positive territory for the first time this year, even as the underlying aversion to Indian equities has not entirely reversed.