Foreign portfolio investors (FPIs) continued to offload Indian equities in September, pulling out ₹23,885 crore (around USD 2.7 billion) and taking the year-to-date net outflow to ₹1.58 lakh crore (USD 17.6 billion), according to data from depositories.
This marks the third straight month of withdrawals, following heavy outflows of ₹34,990 crore in August and ₹17,700 crore in July.
The selling pressure was triggered by multiple global and domestic headwinds, including steep US tariff hikes of up to 50% on Indian goods and a one-time USD 100,000 H-1B visa fee, which dampened sentiment toward export-oriented sectors such as IT. The rupee’s slide to record lows added further currency risk, while relatively high valuations in Indian equities led investors to shift capital toward other Asian markets.
Despite the sustained outflows, debt markets attracted modest foreign inflows. FPIs invested about ₹1,085 crore under the general investment limit and ₹1,213 crore through the voluntary retention route in September.
While equity markets have faced continuous selling, the broader outlook will depend on clarity around trade tariffs, currency stabilisation, corporate earnings trends, and global interest rate movements.
Meanwhile, FPIs’ reallocation of funds to other emerging markets has so far yielded better returns, as Indian equities have underperformed most global peers over the past year, with one-year returns still in negative territory.
