By Saurav Mukherjee

Mumbai (Maharashtra) [India], August 1 (ANI): Foreign investors are beginning to look at India more favourably after months of heavy selling, with Indian equities 'probably oversold', Motilal Oswal's Chairman Raamdeo Agrawal said on Saturday, while cautioning that geopolitical developments and oil prices remain key risks.

Speaking exclusively to ANI on the sidelines of the ninth edition of the Motilal Oswal Business Impact Conference (MOBIC) 2026 in Mumbai, Agrawal said a significant amount of foreign portfolio capital had already exited the country over the past two years.

'In the last two years already we have lost a lot of FPI capital. They've been completely on the outflow, particularly this year... Clearly, a lot of capital has left the country,' he said.

Agrawal attributed the outflows to a combination of factors, including domestic valuations, stronger performance in other global markets and the absence of a strong artificial intelligence investment theme in India.

He added that geopolitical tensions had also weighed on India's external position by keeping oil prices elevated.

'We are seeing for the last one week... a reversal of trend where FIIs are actually looking at India more favourably. Probably they are oversold. That's the situation right now,' he said.

However, he cautioned that the outlook would continue to depend on global developments.

'How geopolitics will shape up, only time will tell. Who knows what's going to happen in Iran? What's going to happen to oil prices?' he said.

Despite the uncertain global environment, Agrawal said India's domestic economy continued to remain resilient, citing strong automobile sales, healthy GST collections and robust credit growth.

'I think the domestic economy is booming. I would say there is a good pickup in the economy... The credit flow is about 18 per cent or so. On the back of that, we are doing very well, except that the forex situation is a little dicey because of oil prices and whatever is happening geopolitically,' he said.

On monetary policy, Agrawal said he expects the Reserve Bank of India to broadly follow the US Federal Reserve's approach.

'Since the US has kept the rate on pause, I would think that we also follow the same trajectory,' he said, while adding that he was 'not a student of monetary economics.'

He also said faster credit growth could put short-term pressure on inflation.

'Last year it was more like 9-10 per cent kind of credit growth. Now we are running at 17-18 per cent kind of credit growth... They may have to moderate the credit growth to control inflation in the short term,' he said. (ANI)