Foreign Investors Pull Out $63.6 Billion from Indian Equities

Foreign institutional investors (FIIs) have withdrawn approximately $63.6 billion (around ₹6 lakh crore) from Indian equity markets between October 2024 and October 2026, according to the figures cited in the report. The outflows have nearly offset the net investments these investors made during the preceding nine years. Between October 2015 and October 2024, FIIs invested a net $63.5 billion in Indian equities. Following recent selling, their cumulative net investment over the 11-year period has reportedly fallen to approximately minus $110 million, or around ₹1,045 crore. This calculation reflects the difference between their purchases and sales, excluding investment returns, and does not mean that foreign investors have completely exited the Indian market.

Several global and domestic factors are influencing foreign investment decisions. Rising crude oil prices, a stronger US dollar, and higher yields on US government bonds are putting pressure on emerging markets, encouraging investors to shift towards dollar-denominated assets. The depreciation of the Indian rupee against the dollar also increases currency-related losses for overseas investors holding Indian shares. In addition, domestic stock valuations and corporate earnings expectations are shaping investment decisions. Foreign investors may reduce their exposure to markets they consider expensive when alternative markets offer more attractive risk-adjusted returns. However, increased buying by domestic institutional investors, including mutual funds, has helped cushion the impact of foreign selling on Indian equities.