Foreign Portfolio Investors (FPIs) continued selling Indian equities in May, with cumulative withdrawals for the month reaching ₹14,231 crore amid global macroeconomic uncertainty, elevated crude oil prices and persistent geopolitical tensions.
According to NSDL data, total FPI outflows from Indian equities in 2026 have now crossed ₹2 trillion, surpassing the ₹1.66 trillion withdrawn during the whole of 2025.
Foreign investors remained net sellers in every month this year except February. FPIs pulled out ₹35,962 crore in January before turning net buyers in February with investments worth ₹22,615 crore, the highest monthly inflow seen in the last 17 months.
The recovery proved temporary as foreign investors recorded a massive outflow of ₹1.17 trillion in March. Selling activity continued in April with net withdrawals of ₹60,847 crore and extended further into May.
Himanshu Srivastava, Principal - Manager Research at Morningstar Investment Research India, said persistent concerns around inflation, global interest rates and geopolitical risks have continued to pressure investor sentiment towards emerging markets.
Srivastava noted that elevated crude oil prices and tensions in West Asia have kept inflation concerns active globally, leading investors to reassess expectations regarding near-term interest rate cuts by major central banks.
He added that relatively firm global bond yields have improved the appeal of developed-market fixed income assets, reducing risk appetite for emerging market equities. According to him, intermittent pressure on the Indian rupee has also affected dollar-adjusted returns for overseas investors.
The sustained FPI withdrawals reflect continued caution among global investors as macroeconomic uncertainty, geopolitical developments and changing global investment trends reshape capital flows across emerging markets.
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Published on: May 11, 2026, 10:32 AM IST
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