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International capital outflow

India FPI Outflows Continue

Analysis based on 6 articles · First reported Apr 12, 2026 · Last updated Apr 12, 2026

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The significant capital outflows from India, driven by geopolitical tensions and global macroeconomic uncertainties, are negatively impacting the Indian economy and leading to the depreciation of the India — Indian rupee. This situation makes other markets like South Korea and Taiwan more attractive to foreign investors, diverting capital away from India.

Financial Services Energy Technology

Foreign portfolio investors (FPIs) have aggressively sold off Indian equities, withdrawing Rs 48,213 crore in the first 10 days of April 2026, adding to a record Rs 1.17 lakh crore outflow in March. This sustained sell-off is primarily driven by escalating geopolitical tensions in West Asia, rising Petroleum prices, and global macroeconomic uncertainties, which have reduced risk appetite. The energy crisis stemming from the West Asia conflict and the continued depreciation of the India — Indian rupee are keeping FPIs in sell mode. Markets in South Korea and Taiwan are currently more attractive to FPIs due to stronger earnings growth outlooks. A reversal in FPI flows is contingent on the credible reopening of the Strait of Hormuz, stabilization of the India — Indian rupee, and positive surprises from India's Q4 earnings season. Even a recent ceasefire between the United States and Iran did not halt the selling momentum, as FPIs used the relief rally as an opportunity to exit further.

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Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, stated that a reversal in flows depends on the reopening of the Strait of Hormuz, rupee stabilization, and positive Q4 earnings from India.
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Himanshu Srivastava, Principal - Manager Research at Morningstar DBRS, noted that selling was largely driven by risk aversion triggered by escalating tensions in West Asia.
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Angel One, through its Senior Fundamental Analyst Vaqarjaved Khan, provided commentary on the conditions required for a reversal in FPI flows.
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S. R. Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, attributed the FPI sell-off to the energy crisis from the West Asia conflict and the depreciation of the India — Indian rupee.
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Morningstar DBRS, through its Principal - Manager Research Himanshu Srivastava, provided analysis on the drivers of the FPI sell-off.
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Geojit Investments Limited, through its Chief Investment Strategist S. R. Vijayakumar, offered insights into the factors influencing FPI behavior.
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Morningstar DBRS related Iran
Petroleum related Taiwan
Petroleum export commodity Iran Petroleum is a critical export commodity for Iran, serving as the primary driver of its economy. The global petroleum ma
Taiwan none Iran Taiwan lacks any direct bilateral ties with Iran, as the two nations operate in entirely different geopolitical spheres
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