New Delhi: Foreign portfolio investors mounted a record exit from Indian equities in 2025, selling shares worth about Rs 1.58 lakh crore as a weak rupee, tariff uncertainty and valuation concerns weighed on overseas sentiment.Data compiled by Mint show that foreign investors sold Rs 22,130 crore worth of Indian equities through stock exchanges in December alone, extending their selling streak to a sixth consecutive month. Cumulative secondary market equity outflows for the year stood at Rs 2.31 lakh crore. Although FPIs invested Rs 73,583 crore in equities through the primary market, net equity outflows for 2025 still came in at Rs 1,58,407 crore, the highest on record.Foreign investors were net buyers in only four months during the year, between March and June, underscoring the persistence of risk aversion despite signs of recovery in domestic consumption and corporate earnings.While equity markets bore the brunt of the exit, overall withdrawals across equity and debt markets were lower. The Hindu BusinessLine, citing National Securities Depository Limited data, reported that FPIs had pulled out a net Rs 94,976 crore from Indian markets up to December 26, reflecting partial cushioning from debt inflows even as equity selling intensified.Selling pressure intensified in the second half of the year and accelerated again in December after a brief pause in November. Analysts attributed the renewed outflows to sustained weakness in the rupee, which depreciated by more than 5% in 2025, making it the worst-performing Asian currency.As per the reports, uncertainty over a proposed trade agreement between India and the United States, elevated equity valuations and India’s relatively limited exposure to the global Artificial Intelligence-led rally also weighed on foreign investor appetite, while other Asian markets offered more attractive valuations.Domestic institutional investors helped cushion the impact of foreign selling. According to Mint, domestic institutions bought Rs 64,056 crore worth of equities in December, taking total inflows for 2025 to a record Rs 7.72 lakh crore, driven by steady retail participation through mutual funds.This domestic support helped limit the impact of foreign outflows on benchmark indices. The Nifty 50 rose about 10% in 2025, keeping it on track for a tenth consecutive year of gains despite persistent pressure from overseas investors.Debt markets saw net inflows of about Rs 59,390 crore during the year, offering partial relief, though this was sharply lower than inflows recorded in 2024, The Hindu BusinessLine reported. Year-end selling nevertheless intensified, with FPIs withdrawing more than Rs 3,100 crore on a single day in the final trading week of December.Market strategists cited by the Indian business newspapers said prospects for foreign inflows in 2026 would depend on currency stability, clarity on trade negotiations and an improvement in corporate earnings. While domestic liquidity remains supportive, they cautioned that foreign investors are likely to remain selective until macroeconomic and policy uncertainties ease.