Foreign portfolio investors (FPIs) withdrew Rs 52,704 crore (about USD 5.73 billion) from Indian equities in the first fortnight of March as escalating tensions in West Asia, a weakening rupee and surging crude oil prices weighed on investor sentiment.
According to depository data, FPIs remained net sellers on every trading day of the month and sold equities worth around Rs 52,704 crore in the cash market between 1 and 13 March.
The latest sell-off follows a brief recovery in February, when foreign investors infused Rs 22,615 crore into domestic equities, the highest monthly inflow in 17 months. Prior to that, FPIs were net sellers for three consecutive months, withdrawing Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November.
Market analysts attributed the renewed outflows largely to geopolitical uncertainty and the surge in crude oil prices.
“Escalating tensions in the region and fears of prolonged conflict disrupting the Strait of Hormuz pushed Brent crude above USD 100 a barrel, triggering a risk-off move,” Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, said. “This was compounded by persistent rupee weakness near the Rs 92 level, elevated US bond yields and profit-booking after earlier inflows.”
Echoing similar concerns, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the conflict in West Asia has weakened global equity markets and dampened investor appetite for emerging market assets.
“Weakness in global equities following the conflict in West Asia, the depreciating rupee and concerns over high crude prices affecting India’s growth and corporate earnings have weighed on FPI sentiment,” he said.
Also read: FPIs pull ₹21,000 crore as markets react to West Asia
He added that relatively lower returns from Indian equities over the past 18 months have also contributed to foreign investor caution.
According to Vijayakumar, markets such as South Korea, Taiwan and China currently appear more attractive to global investors as they remain comparatively cheaper than India despite recent corrections and offer stronger corporate earnings prospects.
“Therefore, further FPI selling in India is likely in the short term,” he said.
Sector-wise, information technology recorded the highest outflows so far in 2025, with FPIs pulling out about Rs 74,700 crore amid subdued revenue growth, tariff-related uncertainties and weaker global technology spending.
FMCG stocks followed with nearly Rs 36,800 crore in outflows due to slowing urban consumption and margin pressures, said Aditya Shankar, Co-founder of Centricity WealthTech.
Power and healthcare sectors also witnessed significant selling, with outflows exceeding Rs 24,000–26,000 crore, largely driven by stretched valuations relative to earnings delivery.
Despite the broader selling trend, foreign investors increased exposure to telecom, oil and gas, metals and chemicals, signalling a shift towards domestic value and commodity-linked sectors.
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