Foreign Portfolio Investors Pull Out Rs 60,847 Crore in April; Record Rs 1.92 Lakh Crore Outflows in First Four Months of 2026.

Foreign Investors Continue to Pull Out of Indian Equities

Foreign investors have continued their relentless sell-off in Indian equities, pulling out Rs 60,847 crore (USD 6.5 billion) in April primarily due to escalating geopolitical tensions and global macroeconomic uncertainties that have dampened risk appetite.

According to data from the National Securities Depository Limited (NSDL), total outflows by Foreign Portfolio Investors (FPIs) have surged to Rs 1.92 lakh crore in the first four months of 2026, significantly exceeding the Rs 1.66 lakh crore outflow recorded in the entire calendar year 2025. A breakdown of the FPI outflows in 2026 is as follows:

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FPIs remained net sellers in all months of 2026 except February, when they withdrew Rs 35,962 crore in January and followed up with an infusion of Rs 22,615 crore, the highest monthly inflow in 17 months.

Market participants attribute the sustained selling pressure to a mix of global macroeconomic headwinds and heightened geopolitical risks.

Escalating Geopolitical Tensions and Global Uncertainty

Himanshu Srivastava, Principal Manager Research at Morningstar Investment Research India, points out that April began with heavy selling as escalating tensions in the Middle East pushed crude oil prices higher, reviving concerns around global inflation. This, in turn, led to reduced expectations of near-term rate cuts and kept global bond yields elevated, weighing on investor sentiment towards emerging markets, including India.

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Vaqar Javed Khan, Senior Analyst Fundamental at Angel One, described April's outflow as a "textbook risk-off reaction" to escalating US-Iran tensions. Khan also notes that crude oil prices crossing USD 100 per barrel, the rupee weakening towards Rs 92 against the US dollar, and the resurgence of inflation and current account deficit concerns have made India's relatively high Nifty valuation of around 21 times price-to-earnings appear expensive amid global uncertainty.

Potential for Stabilization

Khan suggests that if the Iran ceasefire holds and WTI crude falls below USD 90 per barrel, flows could stabilize with selective FPI inflows, supported by strong domestic institutional investor (DII) buying of around Rs 1.7 lakh crore year-to-date and an expected Nifty earnings growth of 16 per cent CAGR between FY26 and FY28.

However, he cautions that while domestic flows may provide a cushion, developments such as tensions around the Strait of Hormuz or a spike in US 10-year bond yields above 4.5 per cent could trigger renewed selling pressure.