With the latest outflows, total withdrawals by Foreign Portfolio Investors (FPIs) from Indian equities have surged to Rs 2.87 lakh crore so far in 2026, surpassing the Rs 1.66 lakh crore pulled out during the entire calendar year 2025, according to data from the National Securities Depository Ltd (NSDL).
Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said FPI flows in the coming week will depend on developments in the US-Iran peace talks, the US Federal Open Market Committee’s policy decision, the Bank of Japan’s rate decision and commentary from major central banks.
According to NSDL data, FPIs have remained net sellers in every month of 2026 except February. They withdrew Rs 35,962 crore in January before turning net buyers in February, investing Rs 22,615 crore, marking the highest monthly inflow in 17 months.
The trend, however, reversed sharply in March, when foreign investors pulled out a record Rs 1.17 lakh crore. The selling pressure continued in April with net outflows of Rs 60,847 crore and in May with withdrawals of Rs 32,963 crore. In June, FPIs have already withdrawn Rs 62,853 crore during the first two weeks of the month.
Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, said investors continue to navigate an environment marked by elevated uncertainty around the interest-rate trajectory of major central banks, geopolitical developments and concerns over global growth.”In such phases, emerging markets often witness tactical de-risking as investors seek safety and rebalance portfolios towards developed markets and defensive assets,” he said.Srivastava added that India’s relatively rich valuations compared with several emerging-market peers may also have prompted foreign investors to adopt a more selective approach towards allocations.
Market participants said the persistent depreciation of the rupee has emerged as another key factor behind the sustained outflows.
The Indian currency has weakened nearly 6 per cent so far in 2026 and around 10 per cent over the past year, falling from the mid-80s level to about 95 against the US dollar despite efforts by the Reserve Bank of India (RBI) to stabilise the currency.
However, the pace of FPIs outflows moderated significantly in the latter half of last week, indicating that while risk aversion remained elevated, the intensity of foreign selling eased gradually.
On Friday, FPIs sold equities worth only Rs 1,082 crore in the cash market.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said recent geopolitical developments and expectations of a peace agreement between the US and Iran have resulted in a sharp correction in Brent crude prices to below USD 87 per barrel.
“For a large oil importer like India, this is a significant positive. India is facing a balance of payments deficit of about USD 60 billion in FY27,” he said.
Given the importance of foreign portfolio flows in financing the current account deficit and supporting the balance of payments, policymakers have announced a series of measures aimed at attracting overseas capital.
These include the RBI absorbing hedging costs on FCNR deposits mobilised by commercial banks, expanding the forex swap window, increasing access to government bonds through the Fully Accessible Route (FAR), and raising investment limits for non-resident Indians and overseas citizens of India in domestic equities.
In contrast to the equity outflows, FPIs invested more than Rs 13,200 crore in debt securities through the FAR route during the first fortnight of June, taking total investments through this channel to nearly Rs 28,000 crore so far this year.
