FPIs Pull Out ₹20,974 Crore from Indian Equities in September 2026 So Far Amid Global Instability and Higher US Rates

Foreign Portfolio Investors (FPIs) have turned cautious in September 2026, making a withdrawal of ₹20,974 crore from Indian equities, driven by ongoing global uncertainties, higher US interest rates, and elevated crude oil prices, among other factors, as per PTI news report. 

FPI Outflows in September 2026 

FPIs pulled out ₹20,974 crore so far in September 2026, after investing ₹20,200 crore in July 2026 and ₹29,630 crore in August 2026.  

The reversal in September 2026 brings the total outflow for 2026 to ₹2.45 lakh crore, surpassing last year’s entire outflow of ₹1.66 lakh crore. 

Impact of Global Economic Conditions 

Global uncertainties, including higher US interest rates and bond yields, have contributed to this outflow. The Federal Reserve has raised rates to 3.75-4.00%, narrowing the yield differential between India and the US.  

Additionally, Brent crude oil prices have remained above USD 100 per barrel, with geopolitical tensions further exacerbating the situation. 

Currency Fluctuations 

The Indian rupee's weakening has compounded these concerns, recording a decline of 1.1% in the previous week alone, reaching a record low against the US dollar. This depreciation adds to the unease among foreign investors. 

Read More: India’s US Exports Rise 21.83% in August 2026; Shipments to China Jump 52.35%! 

Additional Withdrawals in Debt Markets 

FPIs have also extended their selling activity to the debt markets. They withdrew ₹10,296 crore through the Fully Accessible Route (FAR), ₹1,817 crore via the Voluntary Retention Route (VRR), and ₹1,068 crore through the general route. 

Market Uncertainty and FPI Behaviour 

The outflow underscores the volatile nature of current financial markets, with FPIs cautious about investing amidst such unpredictable conditions.  

High US bond yields, pegged at 5%, and elevated crude oil prices remain key challenges for investors considering Indian markets. 

Conclusion 

In September 2026, FPIs withdrew ₹20,974 crore from Indian equities due to global uncertainties related to US interest rates, crude prices, and currency fluctuations. This shift follows investments of ₹20,200 crore and ₹29,630 crore in July and August, respectively. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.