FPI exodus from Indian equities accelerates amid global market pressures

Foreign portfolio investors (FPIs) have withdrawn ₹52,100 crore from Indian equities during October to date, marking an acceleration in selling pressure that extends a bearish trend from September when outflows reached ₹35,861 crore, according to data from the Central Depository Services Ltd (CDSL).

The sustained capital flight reflects a challenging global investment environment where multiple headwinds are steering foreign money away from Indian assets. Elevated crude oil prices, persistently high US bond yields and a strengthening dollar are collectively weighing on investor sentiment, making emerging market equities comparatively less attractive.

The year-to-date figures underscore the severity of the outflow trend. Cumulative FPI withdrawals from Indian equities have reached ₹3.12 lakh crore in 2026, nearly double the ₹1.66 lakh crore pulled out during the entirety of 2025. This represents a sharp reversal from the positive inflows recorded earlier in the year, when FPIs invested ₹20,200 crore in July and ₹29,631 crore in August.

Analysts attribute the selling spree to expectations of sustained higher interest rates in the United States, driven by sticky inflation readings. The prospect of elevated Federal Reserve rates makes US-denominated assets increasingly attractive to global investors, creating relative headwinds for emerging market equities including India. Market participants expect this dynamic to persist as long as global financial conditions remain tight.