FPI Outflows Reach ₹1 Lakh Crore in 2026 Amid US-Iran Tensions and Global Market Volatility

Foreign Portfolio Investor (FPI) Flows in 2026 Witness Significant Volatility

Key Figures:

• ₹35,962 crore: FPI outflow in January 2026
• ₹22,615 crore: FPI inflow in February 2026, the highest level in 17 months
• ₹88,180 crore: FPI outflow in March 2026 (up until March 20)
• ₹1,01,527 crore: Total FPI outflows for the year 2026 (up until March 20)
• 4.5%: Depreciation of the Indian rupee in 2026
• USD 113.6 per barrel: Brent crude price on March 23, 2026 (up 1.24% from previous levels)
• 13.93%: Decline in Nifty 50 year-to-date in 2026
• 14.79%: Decline in Sensex year-to-date in 2026

Market Trends and Analysis

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Foreign portfolio investor (FPI) flows in 2026 have experienced significant volatility, driven by the US-Iran war, weak domestic cues, and global uncertainties. Following a drastic outflow of ₹35,962 crore in January, FPIs witnessed a notable turnaround in February, with inflows reaching ₹22,615 crore, the highest level in 17 months. However, the trend shifted in March, as FPIs withdrew ₹88,180 crore (up until March 20), prompted by increasing global uncertainties, high crude oil prices, and a weakening rupee.

Expert Insights

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, suggests that investors should not panic and get out of the market, but rather watch and wait. He emphasizes that the ongoing war and crude oil price volatility pose significant risks to India's GDP growth and corporate earnings.

Abhinav Tiwari, a market expert, views the ₹1 lakh crore FPI outflows from Indian equities in 2026 as a cyclical risk-off phase rather than a structural concern. He notes that FPI flows have historically been cyclical and that the recent outflows reflect a natural correction after strong inflows in FY24.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, warns that the FIIs continue to press the sell button, offloading ₹5,518 crore in the cash market and extending their selling streak to 16 consecutive sessions.

Market Strategy Ahead

Abhinav Tiwari advises investors to focus on gradual accumulation instead of aggressive deployment, preferring quality businesses with earnings visibility, strong balance sheets, and reasonable valuations. Sudeep Shah suggests that the Nifty 50 index is expected to remain under pressure as long as it trades below 22,800, with the highest put OI concentration at 22,500 emerging as immediate support.