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- Foreign Investors Exit India Markets 2026 | Rupee Weakness, Slow Earnings
Mumbai49 minutes ago
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The process of foreign portfolio investors (FPIs) withdrawing money from the Indian stock market continued in the month of May also. Foreign investors have withdrawn Rs 32,963 crore from the equity market in May.
Investors have taken this step due to slow earnings growth of companies, weakening rupee and better opportunities in global markets.
Sales worth ₹2.25 lakh crore so far in 2026
According to NSDL data, with this latest selling, the total selling figure of FPIs so far in the year 2026 has reached Rs 2.25 lakh crore.
This figure is much more than the total sale of Rs 1.66 lakh crore in the entire year 2025.
Foreign investors were net sellers every month except February
In the year 2026, except for the month of February, FPIs have continuously sold in the Indian market every month.
- January: Foreign investors had withdrawn Rs 35,962 crore from the Indian market in January.
- February: FPIs became net buyers and invested Rs 22,615 crore. This was the largest inflow in any single month in the last 17 months.
- march: This month the trend was completely reversed and foreign investors made huge sales worth a record Rs 1.17 lakh crore.
- april: This phase of selling continued in April also, when there was an outflow of Rs 60,847 crore from the market.
- May: This month too, a withdrawal of about Rs 33,000 crore (exact number 32,963 crore) was recorded.
Why are foreign investors shifting from the Indian market?
- VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that the pace of corporate earnings in India has been a bit slow.
- In comparison, the performance of companies in markets like America, Japan, South Korea and Taiwan has been quite strong, which has inspired FPIs to shift their capital there.
- At the same time, due to Artificial Intelligence (AI) based rally in markets like South Korea and Taiwan, foreign funds have been attracted towards those markets instead of India.
Rupee has weakened by 6% so far in 2026
Sachin Jasuja, Founding Partner and Head of Equities, Centricity Wealthtech, said that the continuously falling value of the rupee is the second biggest reason for the exit of FPIs. The rupee has weakened by about 6% so far in the year 2026 and by about 10% in the last one year.
Despite the efforts of RBI, the rupee has fallen from the level of mid-80 (around 85) to 95.5 against the dollar. Dollar-denominated returns (profits in dollar terms) of foreign investors are directly affected due to the weak rupee.
Concern increased due to rising oil prices and tension in Hormuz
According to Sachin Jasuja, India imports more than 80% of its crude oil requirement, due to which the problems have increased further. Due to the ongoing tension and obstacles around the Strait of Hormuz, the prices of Brent crude have jumped from the range of $ 70 per barrel to $ 95-105 per barrel. Due to this, both India’s import bill and current account deficit have increased.
The pace of selling slowed down in May, global sentiments improved
However, compared to previous months, the pace of selling has slowed down a bit in May. Himanshu Srivastava, Principal-Manager Research, Morningstar Investment Research India, said that this reduction in outflows shows that foreign investors are no longer selling as aggressively as they did at the beginning of the year.
The main reason for this is the gradual improvement in global risks and sentiments. Global trade tensions, tariff-related developments and uncertainties regarding growth still remain, but their pressure has reduced slightly compared to a few months ago.
Future Outlook: Little hope of early improvement
Talking about the future outlook of the market, Sachin Jasuja said that unless there is a major and concrete improvement in the country’s macro-economic conditions (crude oil, rupee and deficit situation), there is little hope of any major U-turn (return) in the inflows of FPIs in the short term i.e. near future.
What are FPIs and why is their movement important?
FPI i.e. Foreign Portfolio Investors are those foreign investors, companies or institutions who invest in the stock market, bonds or other financial assets of another country.
They are also considered ‘hot money’ in the Indian stock market, because they influence the ups and downs of the market to a large extent. When the earning growth in the country is weak or the currency is falling, they withdraw money to secure their investment in dollars.
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