US-based foreign portfolio investors increased their shareholding in the Indian equity market to 41% in January 2026, up from 39.7% in January 2025, according to an analysis of depository data. The increase came during the first year of US President Donald Trump’s second term, despite global economic volatility.
The data showed that US FPIs raised their exposure primarily to large-cap stocks and key sectors. During the same period, the BSE Sensex rose 6.1%, which market participants said helped offset a decline in the overall value of FPI assets.
As of January 2026, total investments by US FPIs stood at Rs 32.1 lakh crore, compared with Rs 29.5 lakh crore in January 2025. During this period, US FPIs recorded net selling of about Rs 1 lakh crore across equity and debt segments.
Debt assets increased by around Rs 15,000 crore, while equity assets rose by more than Rs 2.5 lakh crore over the year. The figures indicate continued allocation by US investors to Indian financial assets.
Satish Menon, executive director at Geojit Financial Services, said US FPIs were increasing investments largely in large-cap stocks. He said uncertainty around a trade agreement between the US and India had reduced, contributing to higher investor confidence. Menon added that weak performance in US equity markets could lead US FPIs to look at other markets.
Nilesh Surana, chief investment officer at Mirae Asset Investment Managers (India), said foreign investor interest in India had moderated over the past 18 months. He said Indian equities became relatively expensive compared with global peers in 2024, while economic growth and corporate earnings also showed some softening.
Surana said global investors were focusing more on artificial intelligence-related investments, which offer relatively fewer opportunities in India. He said these factors were now changing, with AI-related investment momentum peaking and India’s monetary and fiscal policies strengthening its investment appeal.
Surana said the recent correction in Indian markets made valuations more attractive, leading US FPIs to increase their holdings despite net outflows. He said this reflected a long-term investment approach toward India.
Market participants said tax structures and foreign investment policies also contributed to the rising US share in FPIs routed through Mauritius and other jurisdictions. This occurred during a period when the US imposed higher tariffs on India compared with some neighbouring countries.
The higher FPI shareholding supported both equity and debt markets, with increased interest in large-cap stocks lifting benchmark indices such as the BSE Sensex and the Nifty 50. In the debt segment, higher FPI participation indicated continued interest in Indian government and corporate bonds.
