FPI Outflows Moderate in FY26 Despite Continued Volatility in Indian Equity Markets
Net Foreign Investor Selling Declines Compared to Previous Financial Year
Mumbai, March 17Foreign portfolio investors (FPIs) have moderated their selling activity in Indian equity markets during the current financial year FY26, even as volatility in flows persists. Total net outflows stand at Rs 96,974 crore so far in FY26, lower than the Rs 1.27 lakh crore recorded in FY25, according to information shared in Parliament.
In a written reply in the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary stated that FPI flows have continued to fluctuate, with alternating phases of inflows and outflows driven by a mix of global and domestic factors.
Early Inflows Give Way to Sustained Selling Pressure
Official data shows that FY26 began on a positive note, with FPIs investing Rs 4,223 crore in April 2025. This momentum strengthened in the following months, with inflows of Rs 19,860 crore in May and Rs 14,590 crore in June.However, the trend reversed sharply thereafter. July saw outflows of Rs 17,741 crore, followed by heavier selling of Rs 34,993 crore in August. The pressure continued into September, with FPIs withdrawing Rs 23,885 crore.
October brought a brief respite as investors turned net buyers, infusing Rs 14,610 crore. Yet, this recovery was short-lived, with FPIs resuming selling in November and December.
January Sees Peak Outflows; February Offers Temporary Relief
The selling intensified significantly in January 2026, when FPIs pulled out Rs 35,962 crore, marking one of the highest monthly outflows in the fiscal year.February witnessed a temporary turnaround, with inflows of Rs 22,615 crore. However, the recovery did not sustain, as FPIs again turned sellers in March, withdrawing Rs 33,917 crore up to March 10.
Government Says Volatility Does Not Signal Weakening Confidence
Despite persistent fluctuations, the government emphasized that such movements do not necessarily indicate weakening global confidence in Indian markets.It noted that FPI investment patterns are inherently dynamic and influenced by multiple factors, including geopolitical tensions, trade-related uncertainties, global investor sentiment, currency movements, and portfolio rebalancing across emerging markets.
FY26 Outflows Lower Than FY25 Levels
While foreign investor activity has remained uneven throughout FY26, the overall scale of outflows is lower compared to FY25, when FPIs pulled out Rs 1,27,041 crore from Indian equities.This relative moderation suggests a less severe withdrawal trend, even as market participants continue to navigate global and domestic uncertainties.
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