Mumbai: Foreign Portfolio Investors (FPIs) have continued selling Indian equities this month, pulling out Rs 14,231 crore so far in May.
With this, total foreign investor outflow from Indian stock markets in 2026 has crossed Rs 2 lakh crore.
This is significantly higher than the Rs 1.66 lakh crore that foreign investors withdrew during the entire 2025.
The latest data from NSDL shows that foreign investors have remained cautious due to several global and domestic concerns.
How FPI Flows Moved This Year
Foreign investors were net sellers in almost every month this year, except February.
In January, they withdrew Rs 35,962 crore from Indian equities.
February was the only positive month, when FPIs invested Rs 22,615 crore. This was the highest monthly inflow seen in the last 17 months.
However, the positive trend did not continue.
In March, foreign investors pulled out a record Rs 1.17 lakh crore.
This heavy selling continued in April with outflows of Rs 60,847 crore, and the selling pressure has now extended into May.
What Is Driving the Outflows?
Experts say global uncertainty remains the biggest reason behind this selling.
Concerns related to inflation, interest rates and geopolitical tensions are making foreign investors cautious about emerging markets like India.
Morningstar Investment Research India’s Himanshu Srivastava said uncertainty around global interest rates is a major factor affecting investment decisions.
High crude oil prices and tensions in West Asia have increased fears of inflation across global markets.
This has reduced expectations of interest rate cuts by major central banks.
As a result, investors are finding developed-market bonds more attractive than riskier emerging market equities.
Rupee Pressure Also a Concern
Another important reason is the weakness in the Indian rupee.
A weaker rupee reduces returns for foreign investors when converted into dollars, making Indian investments less attractive.
Selective Buying Still Visible
Despite overall selling, FPIs are still showing interest in some sectors.
According to Geojit Investments’ VK Vijayakumar, foreign investors are selectively investing in power, construction and capital goods.
They are also showing preference for mid-cap and select small-cap stocks with strong earnings growth.
He added that markets like South Korea and Taiwan are attracting more foreign money due to strong earnings linked to the growing artificial intelligence boom.
