FPIs Pull Rs 20,974 Crore from Indian Equities in September
Foreign investors withdrew Rs 20,974 crore from Indian stocks in September. This follows a rebound in July and August.
Foreign Portfolio Investors pulled out Rs 20,974 crore from Indian equities in September. The outflow occurred through September 18. This marks a reversal after net inflows in July and August. Investors withdrew Rs 20,200 crore in July. They added Rs 29,630 crore in August. The data comes from CDSL.
The September exit pushes total 2026 outflows to Rs 2.45 lakh crore. This figure exceeds the Rs 1.66 lakh crore withdrawn in all of 2025. Primary market investments continued during the period. However, secondary market selling dominated the net flow.
Yields and crude drive selling
Higher US interest rates reduced the appeal of Indian assets. The Federal Reserve set rates at 3.75 to 4.00 percent. Brent crude remained above USD 100 per barrel. Geopolitical tensions in the Middle East kept oil prices elevated. These factors increased India's import bill and inflation concerns.
The Indian rupee weakened significantly. It fell 1.1 percent in the previous week. This was the sharpest weekly drop in four months. The currency hit a record low of 95.92 to 95.96 per US dollar. It breached the 96 level intraday. This added pressure on foreign investors.
Market participants cite global factors
Strategists attribute the outflow to global conditions rather than domestic issues. The US 10-year yield sits at 5 percent. This high level discourages capital allocation to emerging markets. The Iran-US conflict further complicates the crude oil outlook. These forces create a headwind for FPI flows.
Some analysts view the situation as a broad emerging market trend. Money leaves when oil spikes and US yields firm up. India is not singled out in this process. The resilient Indian economy remains a positive factor. Expectations for better earnings growth support the underlying asset value.
Debt markets see similar exits
Foreign investors also reduced exposure in the debt market. They withdrew Rs 10,296 crore via the Fully Accessible Route. The Voluntary Retention Route saw an outflow of Rs 1,817 crore. The general route recorded a withdrawal of Rs 1,068 crore. These figures cover the period up to September 18.
