&w=3840&q=100)
Foreign Investors pump $1.4 bn into India-ETFs dominate, Active funds lag
According to data from Kotak Institutional Equities (KIE), the ETF segment alone attracted $2.4 billion in June, effectively offsetting the $1 billion in outflows from actively managed non-ETF funds. The growing investor tilt toward passive vehicles is reshaping foreign portfolio trends in India and other emerging markets.
India was the second-highest recipient of foreign capital among emerging markets in June, trailing only South Korea ($1.9 billion). Other major inflow recipients included Brazil ($1.2 billion) and Taiwan ($1 billion).
China stood out as the only major market to report net outflows, with investors pulling out $36 million, highlighting continued caution around the world's second-largest economy.
Key Highlights:
Net Inflows into Listed Funds: India-focused listed funds recorded inflows of $1.4 billion in June. This was driven by ETF inflows of $2.4 billion, which outweighed the $1 billion in outflows from non-ETF (actively managed) funds.
India-Dedicated Funds: These funds saw total net inflows of $726 million, with $633 million coming from ETFs and $93 million from non-ETFs.
GEM Funds: Global Emerging Market (GEM) funds also contributed to the inflow trend, adding $563 million, again led by ETF inflows of $1.3 billion offset by $727 million in non-ETF outflows.
Emerging Market Trends:
India was among the top beneficiaries in emerging markets, attracting $1.4 billion, second only to South Korea ($1.9 billion).
Other key markets like Brazil and Taiwan saw inflows of $1.2 billion and $1 billion, respectively.
China remained an outlier with modest outflows of $36 million, continuing its recent trend of investor caution.
Country Allocations:
India's allocation within Asia ex-Japan funds declined slightly to 16.3% in June from 16.4% in May.
Within GEM funds, India's weight slipped to 18.7% from 19%, reflecting cautious rebalancing despite the inflows.
ETF allocations remained stable while non-ETF allocations declined marginally, suggesting a stronger bias toward passive investing.
As of June 2025, the total foreign portfolio investor (FPI) assets under custody (AUC) in India stood at $865 billion.
The United States remains the largest source of FPI flows into India, with significant contributions from sovereign wealth funds, mutual funds, and pension funds.
"Listed funds witnessed inflows for the second consecutive month. The inflows were driven by ETFs, which attracted US$2.4 bn, offset by non-ETF outflows of US$1 bn. GEM funds saw US$563 mn of inflows, led by ETF inflows of US$1.3 bn, offset by US$727 mn of non-ETF outflows. India-dedicated funds witnessed inflows of US$726 mn (US$633 mn of ETF inflows and US$93 mn of non-ETF inflows). Listed emerging market fund flows were positive for most countries, except for China. South Korea, India, Brazil and Taiwan saw inflows of US$1.9 bn, US$1.4 bn, US$1.2 bn and US$1 bn,respectively. China witnessed outflows of US$36 mn," said Sanjeev Prasad of Kotak Institutional.
These inflows come despite ongoing global macroeconomic uncertainty. Investors appear to be re-allocating capital to markets with stronger growth prospects like India, especially through low-cost ETFs. Meanwhile, active fund managers seem to be taking a more cautious approach, leading to sustained non-ETF outflows.
With ETF momentum staying strong and geopolitical concerns elsewhere, India could continue benefiting from global asset reallocation trends in the coming months.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)

First Post
26 minutes ago
- First Post
'Coercion and pressure': China slams Trump's secondary sanction threat for buying Russian oil
'China will always ensure its energy supply in ways that serve our national interests. Tariff wars have no winners. Coercion and pressuring will not achieve anything…,' said China's Foreign Ministry spokesperson read more US President Donald Trump meets with China's President Xi Jinping at the start of their bilateral meeting at the G20 leaders summit in Osaka, Japan, June 29, 2019. File Photo/Reuters Beijing on Wednesday slammed US President Donald Trump for threatening to impose secondary sanctions on countries that continue purchasing oil from Russia, calling the move an act of 'coercion and pressure.' In a strongly worded response on X, a spokesperson for China's Foreign Ministry said, 'China will always ensure its energy supply in ways that serve our national interests. Tariff wars have no winners. Coercion and pressuring will not achieve anything. China will firmly defend its sovereignty, security and development interests.' STORY CONTINUES BELOW THIS AD Response to U.S. suggestion that it will significantly raise tariffs if China continues to purchase Russian oil: China will always ensure its energy supply in ways that serve our national interests. Tariff wars have no winners. Coercion and pressuring will not achieve anything.… — CHINA MFA Spokesperson 中国外交部发言人 (@MFA_China) July 30, 2025 Earlier in the day, President Trump imposed 25% tariffs and imposed a penalty on India for buying Russian oil amid the ongoing war in Ukraine. He also warned China and threatened to impose tariffs on Beijing. '…Also, they (India) have always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD!' Trump posted on Truth Social. On Tuesday, the US and China agreed to extend their mutual tariff pauses for another 90 days, following two days of high-level bilateral talks held in Stockholm, Sweden. Under the extension, the US will maintain its 30% tariffs on Chinese goods, while China will continue its 10% tariffs on American products. STORY CONTINUES BELOW THIS AD Welcoming the development, China's Vice Premier He Lifeng, who led the Chinese delegation, said: 'A stable, healthy and sustainable China-US economic and trade relationship serves not only the two countries' respective development goals but also contributes to global economic growth and stability.' U.S. Treasury Secretary Scott Bessent, part of the American delegation, described the discussions as 'very fulsome,' noting that the two sides covered a wide range of issues, including China's trade relations with Russia and its oil imports from Iran. 'We just need to de-risk with certain, strategic industries, whether it's the rare earths, semiconductors, medicines, and we talked about what we could do together to get into balance within the relationship,' Bessent added. The agreement marks a temporary easing of tensions in a trade relationship that remains under strain due to strategic concerns and geopolitical alignments. With inputs from agencies


Mint
26 minutes ago
- Mint
Freshworks repurposing staff as AI automates low-value tasks, says CEO
Freshworks Inc., an India-born software-as-a-service (SaaS) firm, will join a growing league of companies changing their hiring strategies this fiscal to focus more on engineers with niche skills as artificial intelligence automates mundane tasks. This, however, may not lead to large-scale layoffs as the company is seeing a steadily increasing number of its clients adopting AI tools and services, according to chief executive Dennis Woodside. The uptake of cutting-edge tools and services will likely see the company continuing to hire, with its focus on higher-value employees instead of freshers and entry-level engineers. Woodside, who took over from founder Girish Mathrubootham in May last year, told Mint that Freshworks' hiring strategy is 'definitely shifting." "We're using AI in our own business to reduce the need for humans to do some of the more mundane stuff. We're repurposing those team members to higher-value, more proactive services," said Woodside. 'We have over 73,000 customers, who ask a lot of questions. Most of those can be answered by AI, so we've reduced employees who were once engaged in reactive support and employed them in proactive customer outreach," the CEO said. 'This directly impacts our revenue, and is more rewarding. We're definitely hiring differently from how we did before the AI wave." AI adoption among clients has changed the pattern of demand for information technology services providers, promoting a shift in hiring strategies. On 27 July, Tata Consultancy Services (TCS), India's largest tech services company by market cap, announced that it will lay off nearly 12,000 employees—about 2% of its global workforce. K Krithivasan, chief executive of TCS, attributed the layoffs to "strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale... and realigning (its) workforce model." While not all companies have commenced such layoffs, industry stakeholders expect a muted hiring market for India's tech-facing talent. 'Changes in hiring strategy will happen across organizations, even if that doesn't immediately mean blanket layoffs or hiring freeze periods. The true impact of AI, which remains to be a work in progress around the world, is yet to be seen," said Sunil Chemmankotil, India country manager at talent solutions firm Adecco. 'While mundane jobs are being automated, most other fields are still experimenting with how to handle the technology," said Chemmankotil. 'This has made companies cautious in hiring and expansions, and most are looking to balance their existing workforce by upskilling them—to see how they suit incoming customer demand." On Tuesday, during Freshworks' Q2FY25 earnings call, Woodside told analysts that the company is currently seeing about 7% of its client base—about 5,000 out of 73,000-odd enterprises—paying specifically for the company's AI software. This helped it generate $20 million in revenue during the June quarter, accounting for just under 3% of its annual revenue of $804 million. With this, San Mateo-based Freshworks, which makes software for companies' internal operations, including customer service and internal communication, becomes one of the first homegrown IT companies to disclose revenue from generative AI. So far, Accenture Plc is among the only large IT firms to report revenue from generative AI deals. Accenture secured $1.5 billion in new generative AI bookings, and revenue of $700 million from generative AI projects. Since September 2023, the company has generated orders linked to generative AI worth $7.1 billion. 'The extent of spending on AI among companies is widely varied. Most IT teams of enterprises have limited budgets, and many of them are allocating more money into AI because they anticipate increasing value from adopting AI. We are seeing increasing budgets being allocated toward AI software, which is benefiting us," Woodside said. Industry experts expect AI spending to rise, but remain cautious in the near term. "We're currently in the first wave of AI adoption, which is seeing generative tools being experimented with for productivity and assistance. This includes automation of customer support, email summarization and the likes," said Jayanth Kolla, partner at tech consultancy firm Convergence Catalyst. 'The second wave of AI adoption will be fuelled by companies looking to optimize cost of operations, which is likely to happen before the end of this fiscal," said Kolla. 'It is only after this that full-scale revenue enhancement will start being realized by AI service providers—for this, mainstream AI adoption is likely to take until FY28." Kolla added that for a start, seeing generative AI revenue contributing 2-3% of a company's top line "is very good, and shows an extremely progressive technology push". Freshworks, founded by executive chairman Mathrubootham in Chennai in 2010, reported Q2FY25 revenue of $204.7 million, up 4.3% sequentially. The company follows a January to December cycle of financial reporting, and counts American Express, Bridgestone, Databricks and Sony among its large clients. In comparison with Indian tech service providers, Freshworks is roughly at the same size as Firstsource Solutions Ltd. The company has guided for a 14-15% jump in revenue to $823-829 million by end-FY25. Freshworks listing on Nasdaq in the US in September 2021, making it India's first SaaS company to go public in America. Since then, the company's stock has taken a beating on slower-than-expected growth—falling from just over $50 per share shortly after listing to around $11 by June 2022. It has since traded around its all-time low, and closed at $13.91 apiece on Tuesday. The software company laid off 13% of its global headcount last year, many of whom were based out of India. This cost the company between $11 million and $13 million in separation-related payments last year. Woodside joined the company amid its restructuring last year. Freshworks also considers Zoho Corp, the country's largest privately-held tech firm, among its competitors. While Zoho reported more than $1 billion in FY23 revenue, it has not yet disclosed its FY24 and FY25 revenue figures. While Woodside said Freshworks is "on track" to achieve its $1 billion revenue milestone, he did not commit to a timeline to achieve this. Freshworks gets 47% of its business from the US, its largest market, followed by 39% from Europe, the Middle East, and Africa.


Time of India
39 minutes ago
- Time of India
Trump imposes 25% tariff on India: Centre hits back, says 'will take all steps to secure national interest'
NEW DELHI: The Centre on Wednesday responded to US president Donald Trump's announcement of 25 per cent tariff on India saying it "has taken note of a statement by the US President on bilateral trade and the government is studying its implications. " "India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective. The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements including the latest Comprehensive Economic and Trade Agreement with the UK," the statement said. Trump, in a post on Truth Social announced that India will pay 25 per cent tariff from August 1 'plus penalty' for buying Russian oil and military arms. The move came just a day after officials announced that a US trade delegation would visit New Delhi on August 25 for the sixth round of negotiations toward a bilateral trade deal. Trump's sudden declaration is being viewed as a high-stakes pressure tactic as Washington secures favourable trade pacts with other key partners such as Japan, the UK, and the EU. In a post on his social media platform Truth Social, Trump said India's trade practices were "among the highest in the world" and claiming the country imposed the "most strenuous and obnoxious non-monetary trade barriers of any country." "All things not good! India will therefore be paying a tariff of 25%, plus a penalty for the above, starting on August first," Trump wrote, referring to India's continued energy and military purchases from Russia. Russia ties draw US ire India's crude oil imports from Russia have soared since the Ukraine war began, jumping from a mere 0.2% of its energy portfolio to an estimated 35–40%. After China, India is now the second-largest buyer of Russian oil. Trump argued that at a time when the international community is urging Russia to end hostilities in Ukraine, India's continued purchases of energy and defence equipment from Moscow send the wrong message. Although Trump acknowledged India as a "friend," he said that US-India trade remained limited because of India's steep tariffs and complex trade barriers. "We have, over the years, done relatively little business with them," he added. In April, Trump had announced a global tariff hike of 26% on select trading partners, including India. That decision was paused for 90 days and extended through August 1 to allow time for trade talks. The baseline 10% tariff remains in effect. Further confusion surrounds the quantum and scope of the "penalty" Trump referred to, which appears separate from the 25% import tax. By comparison, the US currently imposes tariffs of 20% on Vietnam, 25% on Malaysia, 35% on Bangladesh, and 36% on Thailand. Trade talks to continue Despite the latest escalation, bilateral trade talks are set to continue. The upcoming US delegation, led by assistant US trade representative Brendan Lynch, will meet India's chief negotiator Rajesh Agrawal in New Delhi in late August. The two sides concluded the fifth round of discussions in Washington earlier this year. Between 2021 and 2025, the US has been India's largest trading partner, accounting for 18% of Indian exports and 6.2% of its imports. In FY 2024-25, bilateral trade between the two nations reached USD 186 billion, with India enjoying a trade surplus of USD 44.4 billion. India exported USD 86.5 billion worth of goods and imported USD 45.3 billion. In services, it posted a surplus of USD 3.2 billion. What's at stake India's top exports to the U.S. in 2024 included: Drug formulations and biologicals: USD 8.1 billion Telecom instruments: USD 6.5 billion Jewellery and precious stones: USD 8.5 billion Petroleum products: USD 4.1 billion Auto components and garments: USD 5.6 billion combined Imports from the US included: Crude oil and petroleum: USD 8.1 billion Coal and coke: USD 3.4 billion Aerospace parts, electric machinery, and gold: USD 4 billion combined (With PTI inputs) Stay informed with the latest business news, updates on bank holidays and public holidays . Discover stories of India's leading eco-innovators at Ecopreneur Honours 2025