India FPI Outflows Continue
Analysis based on 6 articles · First reported Apr 12, 2026 · Last updated Apr 12, 2026
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.
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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