FIIs (Foreign Institutional Investors): Global funds influenced by the US Fed policy and dollar strength.
DIIs (Domestic Institutional Investors): Domestic institutions powered by ₹20,000+ crore monthly SIP inflows.
– FIIs sold ₹1,59,779 crore, the worst year ever recorded – DIIs absorbed the pressure with consistent net buying – Nifty still touched all-time highs despite FII exodus
Analysts expect FIIs to turn positive by early to mid-2026 for the following reasons.
GDP Growth: 6.5-6.8% projected for FY26 (RBI forecast) Earnings Revival: 12-15% corporate earnings growth expected Inflation: Below 4.5%, creating room for rate cuts Policy Support: GST reforms boosting consumption
A robust macro setup supports equity markets despite global headwinds.
Nifty 50 target ~32,000
Nifty 50 target ~29,000-29,300
Nifty 50 target ~26,000-27,000
Earnings recovery (12-15% growth), monetary easing, sustained domestic flows, and selective FII return.
Structural Shift: India's market is now less vulnerable to foreign outflows than ever before.
What Could Bring FIIs Back:
– Global rate cuts and dollar weakness – Improving earnings visibility – Attractive risk-reward after valuation correction – "China+1" supply chain shift opportunities
2026 is shaping up as a year of balance, not dependency. Even if FIIs return slowly, strong DII flows and stable economic fundamentals are likely to keep Indian markets steady and resilient.