FPI vs FDI Explained: What’s the difference and why do they impact India’s financial markets differently?
Last Update Date: 05-10-2026
Published by Mint
Abhishek Kumar's role: Quoted
Abhishek Kumar explained that FDI is long-term capital tied to businesses and hard to withdraw, while FPI can exit within a trading session, and said FPI selling reflects shifts in global risk appetite rather than a verdict on India's long-term prospects.
More of Abhishek's views on money management
The article explains how foreign portfolio investment and foreign direct investment differ. It compares them on the type of investment, ownership stake, role in the business, time horizon, ease of exit and regulation, and explains why portfolio flows move stock indices, the rupee and bond yields faster than direct investment.
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FPI vs FDI Explained: What’s the difference and why do they impact India’s financial markets differently?