Foreign investors withdrew a record Rs 1.6 lakh crore (USD 18 billion) from Indian equities in 2025, marking the largest outflow due to global factors like rising US bond yields, a stronger dollar, trade tensions, and geopolitical uncertainties. Stretched domestic valuations also contributed to profit-booking. Despite this, experts anticipate a reversal in 2026, expecting sustainable inflows driven by India's growth prospects, potential US trade deals, and anticipated US Federal Reserve rate cuts. Meanwhile, foreign investors showed strong interest in Indian debt markets.