indian rupee
Amidst the continuous weakness in the Indian rupee and selling by foreign investors, a new debate has started regarding Systematic Investment Plan (SIP). After a recent Jefferies report, questions started being raised whether the strong SIP inflow from domestic investors gave an opportunity to foreign investors to easily exit the Indian market, thereby increasing the pressure on the rupee.
However, in this entire controversy, experienced investor and founder of Helios Capital Sameer Arora has strongly defended SIP investment. He said that it would be wrong to assume that if money does not come in SIP, then the rupee would automatically benefit from it. According to Sameer Arora, the real question is that if domestic investors had not invested in SIP, where would their money have gone? He said that people either invest in foreign markets, buy gold, spend more or keep money in low interest bank deposits. It is not right to believe that the impact of all these options will be positive on the rupee.
He said that at present the trend of foreign investment is increasing rapidly. If Indian investors had invested their money in foreign shares or funds, it would have increased the demand for dollars, which would have put further pressure on the rupee. Similarly, investment in gold also cannot be considered a good option for the rupee, because India imports most of the gold it needs. Arora also said that a disciplined investment system like SIP helps people create wealth in the long term. If this money was spent on things like mobile phones, electronics, luxury expenses or eating out, it would not have provided permanent strength to the economy.
How did the debate start?
Actually, this whole debate started when Jefferies said in its report that the main reason for the weakness of the Indian rupee is not the current account deficit, but weak capital inflows. According to the report, in the last two years, foreign institutional investors (FIIs) withdrew about $78 billion from the Indian equity market. Despite this, strong SIP inflows and mutual fund investments by domestic investors kept the market under control.
We should complete this line of reasoning. So if Indian investors did not do SIP they could have done the following: a) Invest outside India which everyone seems to favor this month. Could not have helped the Indian Rupee though b) Bought gold which everyone seemed to favor at https://t.co/69B0BJncYz
— Samir Arora (@Iamsamirarora) May 23, 2026
The report said that institutional investments like SIP, tax incentives and EPFO-NPS played a big role in keeping the Indian market stable. According to the data of Association of Mutual Funds in India i.e. AMFI, there was a record net inflow of Rs 38,503 crore in equity mutual funds in March 2026, while in April 2026 also this figure remained at a high level of Rs 38,410 crore.
So far this year, the Indian rupee has weakened by about 7 percent against the US dollar and has crossed the level of 96 against the dollar. Due to this, the rupee has become one of the weakest currencies of the emerging markets. However, Jefferies believes that foreign investment often returns after a sharp fall in the rupee. According to the brokerage, if the valuations of the Indian market become attractive, the impact of AI trade reduces and the geopolitical concerns related to the Strait of Hormuz reduce, then there may be an improvement in foreign investment in the coming times.
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