Rupee Strength Boosts Prospects for FPI Inflows into Indian Markets

Analysts say that a broader improvement in global stability has helped the Indian rupee recover against the dollar, moving from a low of 96.96 per USD in late May to a closing rate of 94.34 on 19 June. During the week ending 19 June, foreign portfolio investors (FPIs) posted a net purchase of about 3,386 crore rupees in Indian equities, ending a period of consistent net selling.

The recovery in the rupee is cited as the main driver behind the shift, and analysts expect further foreign inflows through FCNR‑B bond issuances in FY 2027. A decline in Brent crude to around $80 per barrel could also ease funding of India's current‑account deficit. Concentration risk remains in a few South‑Korea and Taiwan‑listed stocks, but AI‑linked businesses and companies such as Samsung, SK Hynix and TSMC continue to attract interest.