2024 has been a bruising year for India on the foreign investment front. Foreign Portfolio Investment (FPI) inflows collapsed by a staggering 99%—from ₹1.71 lakh crore in 2023 to a meager ₹2,026 crores, according to NSDL data. It’s a wake-up call for Asia’s third-largest economy, underscoring the challenges in keeping global investors interested. The U.S. economy, flexing its “exceptionalism,” pulled much of the world’s capital. Higher interest rates, booming markets, and resilient economic data made U.S. bonds, equities, and money markets irresistibly attractive. That money had to come from somewhere, and emerging markets, including India, took the hit. On India’s side, valuations didn’t help. Elevated price-to-earnings ratios, a sky-high market cap-to-GDP ratio, and slowing GDP growth turned off investors looking for value. Throw in weaker industrial output and lackluster corporate earnings, and India became an increasingly tough sell. The Reserve Bank of India tightened liquidity and introduced stricter rules on unsecured lending, dragging down banks and non-bank financial institutions—a sector FPIs traditionally favor. Despite this, FPIs showed selective confidence, sticking with India’s primary markets and long-term opportunities. On the bright side, domestic investors stepped up, cushioning the blow and preventing the markets from spiraling out of control.