India's financial landscape has seen a decisive turnaround as foreign portfolio investors return to domestic markets. After three consecutive months of heavy selling totaling over **62,000 crore** between November and January, Foreign Portfolio Investors (FPIs) turned net buyers in February 2026. Data as of February 20 shows a total net investment of **29,252 crore** for the month. This shift is largely attributed to the successful conclusion of a landmark Free Trade Agreement (FTA) with the European Union and the finalization of an interim trade deal with the United States. The Reserve Bank of India, in its February monthly bulletin, noted that these strategic trade deals have fundamentally improved investor sentiment. The India-EU FTA provides preferential access to **99.5%** of India's trade value, eliminating duties on labor-intensive sectors like textiles, leather, and gems. Simultaneously, the interim pact with the U.S. has reduced reciprocal tariffs from levels as high as **50%** down to a stabilized **18%**. This move alone provided an immediate relief of approximately **1.50** per dollar for the Indian Rupee, lifting it from record lows near **92.00**. The Indian Rupee has stabilized around the **90.80** mark against the U.S. Dollar. The currency's resilience is further supported by India's record foreign exchange reserves, which have climbed above **$723 billion**, providing the central bank with significant firepower to manage market volatility. Domestically, the Reserve Bank maintained the repo rate at **5.25%** during its February meeting. The decision to keep rates steady, combined with a fiscal deficit target of **4.3%** announced in the Union Budget, has reinforced India's image as a stable investment destination. Real GDP growth for the current fiscal year is now poised to reach **7.4%**, outperforming previous estimates. Analysts suggest the new trade framework could add another **20 to 50 basis points** to India's growth trajectory as businesses integrate more deeply into global supply chains. While challenges such as volatile global commodity prices and higher transaction taxes on derivatives remain, the twin trade agreements have effectively established a new floor for both the equity markets and the rupee. This structural shift marks a transition from defensive market consolidation to a phase of trade-led economic expansion.