Union Finance Minister Nirmala Sitharaman Monday said the foreign institutional investors (FII) are selling Indian equities lately due to the profit booking.

She said the Indian economy is one where the investors are bagging better returns which leads to profit booking.

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The Finance Minister said India is delivering good returns to investors who are booking profits.

“FIIs also go out when they are able to or in a position to book profits. Indian market today, Indian economy today, has an environment in which investments are also yielding good returns and profit booking is also happening,” she said while addressing a press conference in Mumbai.

The Finance Minister also answered a question on inflation, and said the government’s supply measures and the Reserve Bank’s demand-side initiatives are working in tandem to control price rise.

Further, Finance Secretary Tuhin Kanta Pandey also said that the FIIs are not moving from one emerging market to another, and added that in times of global uncertainties like the one being witnessed right now, they tend to go back to the country of origin, which is mostly the US.

Pandey also hinted that these shifts may be temporary, and added that Indian markets are resilient.

He explained that apart from demand-supply issues, growth prospects also influence investor behavior and that India remains the fastest-growing large economy and added that the recently announced Budget has a slew of growth-oriented measures.

“We have faced global headwinds in the past and will continue to face them. But I think India is in a strong position to handle it,” he added.

Secretary of the Department of Economic Affairs, Ajay Seth, dismissed any idea of government interference in the market because of the heavy sell-offs, stating that such a move can be carried out only if there is any evidence of market failure, which is not the case at present.

He said equities do not function on government policies alone, and added that foreign investors go to developed or bigger markets in periods of uncertainties.

Notably, FIIs have sold over Rs 1.56 lakh crore of stocks since October last year, including nearly Rs 1 lakh crore in 2025 itself, which has led to a sharp correction on the indices and wiping out investor wealth.