Amid rising geopolitical tensions, concerns over global economic growth, and ongoing depreciation of the rupee, foreign portfolio investors (FPIs) continued their sell-off of Indian stocks, withdrawing over Rs 62,853 crore in the first two weeks of June.
Record Outflows in 2026
According to data from the National Securities Depository Ltd (NSDL), the latest sell-off has pushed cumulative FPI outflows from Indian equities to Rs 2.87 lakh crore so far in 2026. This surpasses the Rs 1.66 lakh crore that was wiped out during the entire year of 2025.
The data reveals that overseas investors were net sellers in every month except February 2026. In February, FPIs were net buyers with investments of Rs 22,615 crore, marking their largest monthly inflow in 17 months. This followed a withdrawal of Rs 35,962 crore in January. However, selling resumed thereafter and has continued through June.
Market Uncertainty and Investor Sentiment
Himanshu Srivastava, principal manager of research at Morningstar Investment Research India, noted that investors are still navigating an environment marked by high uncertainty regarding the trajectory of major central banks' interest rates, geopolitical developments, and concerns about global growth.
“In such phases, emerging markets often witness tactical de-risking as investors seek safety and rebalance portfolios towards developed markets and defensive assets,” he said.
Government and RBI Measures
Recently, the Reserve Bank of India (RBI) and the government announced measures to attract foreign capital. According to a report by Yes Bank, these measures could bring inflows of around USD 35-40 billion, helping bridge India's anticipated balance of payments (BoP) gap in FY27 and strengthening foreign exchange reserves.
The report stated that the measures are aimed at incentivizing foreign capital inflows into India at a time when the country is seeking to contain pressure on the rupee and improve external sector stability.
