Foreign portfolio investors (FPIs) have turned net sellers of Indian equities in September 2026, withdrawing more than ₹23,000 crore through September 19. Data shows outflows of approximately ₹23,676 crore via the exchanges during this period, reversing the net buying seen in July and August.
The selling comes against a backdrop of global uncertainty, elevated crude oil prices, higher US interest rates and bond yields, and a weakening Indian rupee.
Key Numbers
September outflow (up to September 19): Around ₹23,676 crore through the secondary market (exchanges).
Some reports citing data up to September 18 put the figure at ₹20,974 crore.
July 2026: Net inflows of about ₹20,200 crore.August 2026: Net inflows of about ₹29,630 crore.
Calendar year 2026 (so far): Cumulative equity outflows have reached approximately ₹2.45 lakh crore, already surpassing the full-year 2025 outflow of ₹1.66 lakh crore.
Despite the secondary-market selling, FPIs continued to invest in the primary market. Inflows through IPOs and other primary issuances stood at around ₹2,703 crore in September (up to September 19), taking the year-to-date primary market investment by FPIs to roughly ₹48,550 crore.
Why Are FPIs Selling?
Market experts point to three main drivers:
Higher US Interest Rates and Bond Yields
The US Federal Reserve’s recent rate hike and elevated US Treasury yields (with the 10-year yield near 5%) have narrowed the yield differential with India, reducing the relative attractiveness of Indian assets for foreign investors.
Elevated Crude Oil Prices
Brent crude remaining above $100 per barrel amid Middle East geopolitical tensions has raised concerns over India’s import bill, inflation, and current account. Higher oil prices typically increase dollar demand and pressure emerging-market currencies and equities.Weakening Rupee and Global Risk AversionThe Indian rupee faced pressure in recent weeks, adding to foreign investors’ caution. Broader global uncertainty linked to geopolitical developments has also prompted risk-off flows out of emerging markets.
Weakening Rupee and Global Risk Aversion
The Indian rupee faced pressure in recent weeks, adding to foreign investors’ caution. Broader global uncertainty linked to geopolitical developments has also prompted risk-off flows out of emerging markets.
Analysts note that the September selling appears more driven by these global macro factors (“a crude-and-dollar story”) rather than a fundamental loss of confidence in India’s long-term growth story. Domestic institutional investors (DIIs) have continued to provide support in many sessions.
Market Impact and Outlook
The renewed FPI selling has added to near-term volatility in the equity markets, even as the primary market remains relatively buoyant due to continued foreign interest in IPOs.
Going forward, FPI flows are expected to remain sensitive to:
Movements in crude oil prices and Middle East developments
Trajectory of US bond yields and the Federal Reserve’s policy path
Stability of the Indian rupee
Relative valuations of Indian equities versus other emerging markets
Investors and market participants will closely monitor weekly FPI data, oil prices, and global yield movements for cues on whether the September outflow marks a temporary pause or a more sustained shift in foreign investor sentiment.