Rs 35,000 crore FII selloff in August. Can GST reforms, tariff relief and a strong GDP print turn the tide?

Foreign institutional investors withdrew Rs 34,993 crore from Indian equities in August, the sharpest monthly selloff of 2025, driven by U.S. tariffs and weak earnings. Financials and IT led sectoral outflows. Despite strong GDP growth at 7.8%, India has slipped in EM fund preferences. Analysts expect GST reforms and policy signals to revive FII sentiment.