It is not incorrect to say that not long ago, the Indian stock market lived and died by the mood of foreign investors. Often when Foreign Institutional Investors (FIIs) dumped ₹3,000-4,000 crore in a single session, the Sensex could fall drastically and the Nifty would bleed. Conversely, a gush of foreign inflows could spark instant euphoria on Dalal Street.

For decades, Indian markets were like the puppets who danced to the tune of FIIs, the puppeteers. During my investment banking days, we vigorously monitored the movements of FIIs. A whiff of tightening by the US Federal Reserve, a jump in US bond yields, or a geopolitical tremor would ripple through Mumbai within minutes. We lived in an uncertain world as far as the markets were concerned. It will be misleading to say that that era has vanished entirely. But it is no longer dominant.

The Indian stock market of 2025 is structurally different. Thanks to the Modi government’s policies, it is more resilient and more self-assured, and far less skittish. The gravitational centre of Indian equities has shifted, perhaps irreversibly. Foreign capital still matters, but it no longer commands the sentiments of the Dalal Street. The new custodians of market stability are domestic — the Indian household, domestic mutual funds, insurance money and long-term institutional capital. The steady growth in the salaried systematic investment plan (SIP) contributions has been one of the strongest factors for the Indian stocks being far less dependent on FIIs. It did not happen organically. The people who earlier parked their savings in fixed deposits........

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