Business Economy


FPIs pull out over Rs 3 lakh cr from Indian equities, October outflows deepen

New Delhi, Oct 11 (UNI) Foreign portfolio investors (FPIs) have withdrawn Rs 44,166 crore from Indian equities so far in October, taking cumulative outflows in 2026 to Rs 3.04 lakh crore, as rising crude oil prices, a stronger US dollar and elevated US bond yields weigh on the appeal of domestic stocks.
The latest sell-off also reflects a shift in global investment flows towards North Asian markets, where the artificial intelligence-led rally has attracted greater foreign investor interest. The October withdrawals follow net equity outflows of Rs 35,861 crore in September, indicating continued pressure on foreign investment in Indian markets.
According to data from the National Securities Depository Ltd (NSDL), FPIs had invested Rs 20,200 crore in Indian equities in July and Rs 29,631 crore in August before reversing course in September. The latest withdrawals have pushed total foreign investor selling in 2026 well above the Rs 1.66 lakh crore withdrawn during the entire calendar year 2025.
The sustained selling comes amid a challenging global macroeconomic environment. Elevated crude oil prices can increase India's import bill and inflationary pressures, while a stronger US dollar and higher Treasury yields make dollar-denominated assets relatively more attractive to international investors. These factors can also weigh on the rupee and influence foreign investors' allocation decisions.
The growing interest in AI-linked stocks across North Asian markets has added another dimension to the movement of global capital. As investors seek exposure to companies benefiting from AI-related growth, Indian equities have faced competition for foreign funds, particularly in the absence of a comparable concentration of AI-focused investment opportunities in the domestic market.
Foreign investor selling has also extended to India's debt market, although flows have varied across investment routes. In September, FPIs withdrew Rs 1,921 crore through the Fully Accessible Route (FAR) and Rs 233 crore through the Voluntary Retention Route (VRR). However, they invested Rs 4,729 crore through the general investment route.
The divergence in debt flows suggests that foreign investors have not adopted a uniform approach across India's fixed-income market. Nevertheless, the scale of equity withdrawals highlights the pressure on portfolio flows as global investors reassess risk, returns and opportunities across markets. UNI VK AAB
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