Foreign Portfolio Investors Experience Near ₹1.9 Lakh Crore Outflow in 2026 Amid Global AI Stock Correction

Foreign Portfolio Investors Pull Out ₹1,89,991 Crore from Indian Equities in 2026

Foreign portfolio investors (FPIs) have withdrawn a total of ₹1,89,991 crore from Indian equities so far in 2026, indicating continued caution in the face of global uncertainties and tight liquidity conditions. The outflows are being driven by the global AI-led rally, which is attracting significant capital into a handful of technology stocks in markets like the US, South Korea, and Taiwan.

The FPIs have remained net sellers in 2026, with the trend becoming more prominent in recent months. In April, selling was at ₹58,869 crore, following a higher outflow of ₹1,17,775 crore from March. February's net inflows of ₹22,615 crore were insufficient to overcome January's high selling, which totaled ₹35,962 crore.

FPI flows have been volatile in recent years, with dramatic swings between inflows and outflows. In 2025, foreign portfolio investors sold ₹1,66,286 crore of Indian shares. In contrast, FPIs invested ₹1,71,107 crore in 2023, indicating better global risk appetite and domestic development prospects.

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Experts believe that the outflows are driven by the global AI trade, which is attracting massive amounts of capital flows to AI stocks in the US, South Korea, and Taiwan. This trade is a concentrated trade in a few stocks, and so long as it continues, FPI selling in India, particularly in largecaps, will continue.

Mohit Gulati, CIO and managing partner of ITI Growth Opportunities Fund, said that FPIs are not selling India because India is broken. They are selling India because the opportunity cost of not being overweight US tech has rarely been this punishing. Gulati believes that the FPI selling has compressed valuations in pockets of the market that deserve a second look. Patient money should be paying attention.

Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, added that the principal reason for the selling is the global AI trade. When the AI trade continues, FPI selling in India, particularly in largecaps, will continue. However, Vijayakumar believes that the AI trade is unlikely to last long, and a correction in AI stocks can reverse the trend of FPI selling in India.

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The FPI trend is unlikely to reverse until the global risk-off shift subsides, and capital stops chasing high-growth AI stocks like Nvidia, Microsoft, Alphabet, and Meta. Stretched valuations could trigger a correction, potentially reversing FPI outflows. Gulati explained that the FPI outflow from Indian equities in 2026 is not a verdict on India but a textbook risk-off rotation. When Alphabet, Microsoft, Meta, and Nvidia are printing earnings that would make any capital allocator pause, the calculus for taking on emerging market risk becomes harder to justify.