Domestic valuation, AI, geopolitics reasons for FPIs pulling out, says Motilal Oswal Financial Services' Raamdeo Agrawal

Raamdeo Agrawal, Chairman of Motilal Oswal Financial Services feels that the Indian equity market has lost a number of foreign portfolio investors (FPIs) over the past two years for various reasons.

Speaking to news agency ANI today, Agrawal said Indian equity valuations have been impacted by withdrawal of FPIs, adding “it was because of many reasons — domestic valuation, other markets doing very well, artificial intelligence (AI) story not happening in India”.

He further noted, "Geopolitical situation has put pressure on India's forex situation because of high oil prices… we are seeing a reversal of trend where FPIs are actually looking at India more favourably...”

Growth drivers for Indian corporate sector

When asked about the growth drivers for Indian corporate sectors, Agrawal felt that auto and manufacturing would be the leading sectors.

“On the manufacturing side, automotive will be one of the big sectors. Even today, the numbers which are coming for July; the volumes are up anywhere between 20% to 50% by the major producers...”

He added, “(The) June goods and services tax (GST) collection is up 15.5% despite the cut of rate slabs from 28 to 18%. I think the domestic economy is booming. There's a good pickup in the economy and the credit flow is about 18% or so.”

According to Agrawal, India is “doing very well”, but the war in the middle east could have significant impact. “We are doing very well, except that the forex situation is a little dicey because of oil prices and whatever is happening geopolitically… we have to see that the geopolitical situation doesn't go out of hand,” he stated.

Watch: Raamdeo Agrawal, Chairman, Motilal Oswal Financial

Indian stock market registers broadest rally

Notably, LiveMint data research has found that the Indian stock market has largely been resilient despite oil price volatility due to the war between the United States and Iran, and amid concerns over possible monetary tightening.

Overall uptrend in the Indian market over the last two months can be attributed to a decline in crude oil prices, better-than-expected Q1 results announcements, and easing AI-trade. The data showed:

• The key benchmark index Nifty 50 gained 2.2% in July, extending gains for the second consecutive month,
• While the Nifty Midcap 100 clocked a gain of 1.8%.
• The Nifty Smallcap 100 outperformed, rising 2.5% for the month.
• While the Nifty 50 index is down nearly 7% year-to-date, it has clocked gains in three out of the last four months.
• In April, the index jumped 7.5%, snapping its four-month losing streak, followed by a 2% decline in May.
• In the month of June and July 2026, the LiveMint research says that the 50-stock index gained 1.40% and 2.20% respectively. However, in May 2026, the index shed 1.90%.

(With inputs from ANI)