Foreign Investors Pull Out ₹1.8 Lakh Crore from Indian Markets Year to Date

Foreign Portfolio Investors Pull Out ₹1.8 Lakh Crore from Indian Equities in 2026

Foreign Portfolio Investors (FPIs) have withdrawn approximately ₹1.8 lakh crore from Indian equities in 2026 to date, surpassing the ₹1.66 lakh crore exit recorded in 2025. This trend is primarily driven by rising geopolitical tensions in West Asia, increasing crude oil prices, depreciation of the rupee, and a global aversion to risk, as per experts.

The FPIs are shifting their investments to markets that offer lower valuations and specific sectoral advantages, particularly in Japan, Taiwan, South Korea, and select European countries. Additionally, there is evidence of profit-taking from previous gains in India being reinvested on a global scale, as noted by experts.

Global Equity Market Inflows

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Several global equity markets have witnessed strong foreign institutional investor (FII) inflows over the past 12 months. According to Bloomberg data, the United States led with inflows of $753.5 billion as of January 31, 2026, followed by the Euro Area at $529.1 billion (January 31, 2026) and Luxembourg at $484.3 billion (December 31, 2025).

Expert Insights

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, explained that the energy crisis triggered by the conflict in West Asia, the potential impact of the crisis on the Indian economy, and sustained depreciation of the rupee kept the FPIs on sell mode. Vijayakumar noted that markets like South Korea and Taiwan are viewed as more appealing for Foreign Portfolio Investors, as these markets are anticipated to achieve significantly better earnings growth than the modest growth projected in India for FY27.

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Sunny Agrawal, Head of Fundamental Research at SBI Securities, said that in the backdrop of weakening USD/INR and likely fear of increase in inflationary pressure in India, FIIs are chasing new-age tech businesses in the developed world like the US, Europe, and are inclined towards commodity-facing businesses in Brazil, as prices of commodities continue to remain buoyant.