'Yielding good returns': FIIs selling Indian equities due to profit booking, says Nirmala Sitharaman

NEW DELHI: Finance minister Nirmala Sitharaman on Monday dismissed concerns over the recent sell-off by foreign institutional investors (FIIs) in Indian equities, attributing it to profit booking.

She claimed that investors are making strong returns in India, which naturally leads to periodic profit-taking.

"FIIs also go out when they are able to or in a position to book profits. Indian market today, Indian economy today, has an environment in which investments are also yielding good returns and profit booking is also happening," she said, quoted by news agency PTI.

Since October last year, FIIs have offloaded stocks worth over Rs 1.56 lakh crore, including nearly Rs 1 lakh crore in 2025 alone. This has triggered a sharp correction in the indices, eroding investor wealth.

FII moves temporary, says finance secretary

Finance secretary Tuhin Kanta Pandey clarified that FIIs are not shifting from India to other emerging markets, instead returning to their home countries, primarily the US, amid global uncertainties.

He said that these movements are often temporary. Indian markets have demonstrated resilience in the past and will continue to do so.

Pandey explained that apart from demand-supply dynamics, investor sentiment is also influenced by growth prospects. He reiterated that India remains the fastest-growing large economy and highlighted the pro-growth measures introduced in the recent Union Budget.

"We have faced global headwinds in the past, and will continue to face them. But I think India is in a strong position to handle it," he added.

No market intervention needed, says DEA secretary

Ajay Seth, secretary of the department of economic affairs, dismissed any suggestion of government intervention in the markets due to the heavy sell-offs. He stated that such actions would only be justified in cases of market failure, which is not the situation at present.

He said that equity markets do not operate based on government policies alone. In times of uncertainty, foreign investors often move to developed markets. He further added that while India has shown resilience to global events, it remains partially connected to broader economic trends.

India remains investor-friendly amid tariff concerns

On concerns about US tariff policies, Sitharaman reaffirmed India’s commitment to develop an investor-friendly environment. She pointed to recent Budget announcements, including reforms in customs duties, aimed at strengthening trade and investment.

Over the past two years, India has taken several steps to safeguard local industries and jobs through tariff adjustments, she noted, adding that anti-dumping and safeguard duties are also reviewed periodically.