Foreign Portfolio Investors (FPIs) continued their selling spree in Indian equity markets this month, pulling out Rs 27,048 crore so far in May amid global economic uncertainty, elevated geopolitical tensions and rising crude oil prices.
With the latest withdrawals, total FPI outflows from Indian equities in 2026 have crossed the Rs 2.2 lakh crore mark, surpassing the entire outflow recorded in 2025, according to data from the National Securities Depository Limited (NSDL).
Foreign investors had withdrawn Rs 1.66 lakh crore from Indian equities during the whole of 2025.
FPIs have remained net sellers in every month of 2026 except February.
In January, foreign investors pulled out Rs 35,962 crore before briefly turning buyers in February, when they infused Rs 22,615 crore — the highest monthly inflow in 17 months.
However, the trend reversed sharply in March, with FPIs withdrawing a record Rs 1.17 lakh crore from Indian markets.
The selling pressure continued in April with net outflows of Rs 60,847 crore and has extended into May with withdrawals exceeding Rs 27,000 crore so far.
Market experts attributed the persistent outflows to mounting global macroeconomic and geopolitical concerns.
Himanshu Srivastava, Principal – Manager Research at Morningstar Investment Research India, said uncertainty surrounding global growth, volatile crude oil prices and geopolitical tensions across key regions continued to weaken investor appetite for emerging markets such as India.
He added that a stronger US dollar and elevated US bond yields have also made developed market assets relatively more attractive for global investors.
“Higher returns in safer developed markets have encouraged investors to adopt a defensive approach,” Srivastava said.
He further noted that concerns surrounding inflation trends and uncertainty over future interest rate cuts by major central banks were influencing global capital allocation decisions.
Geojit Investments Chief Investment Strategist V K Vijayakumar said persistent FPI selling and a widening current account deficit have added pressure on the Indian rupee.
“At the beginning of the year, the rupee was at 90 against the US dollar. On May 15, it breached the 96-mark to touch 96.14,” he said.
Vijayakumar warned that the rupee could weaken further if FPI outflows continue and global crude oil prices remain elevated.
He also pointed to growing global investments in artificial intelligence-focused companies, saying the trend has diverted capital away from markets like India that are perceived to be lagging in the AI sector.
“This trend could reverse once the AI trade, which appears to be in bubble territory, eventually cools off,” he added.
The continued foreign fund outflows come at a time when global investors remain cautious amid volatile energy markets and uncertain monetary policy outlooks across major economies.
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