Foreign portfolio investors have withdrawn ₹1.89 lakh crore from Indian equities in 2026, marking a significant shift in global capital flows. According to reports from LiveMint, the selling trend has intensified in recent months, with ₹58,869 crore in outflows recorded in April alone, following a substantial ₹1,17,775 crore withdrawal in March. This represents a dramatic reversal from February's net inflows of ₹22,615 crore, which were insufficient to offset January's high selling of ₹35,962 crore.
Market experts attribute the sustained FPI selling to the global AI-led investment boom rather than domestic weakness. As reported by LiveMint, Dr. VKVijayakumar, Chief Investment Strategist at Geojit Investments Ltd, explains that the principal reason for selling is the massive capital flows attracted by AI stocks in the US, South Korea, and Taiwan. Mohit Gulati, CIO and managing partner of ITI Growth Opportunities Fund, emphasizes that FPIs are not selling India because India is broken, but because the opportunity cost of not being overweight US tech has rarely been this punishing. The selling reflects a risk-off rotation as global capital gravitates toward high-conviction AI investments.
The current outflows continue a volatile pattern of FPI flows in recent years. According to LiveMint data, foreign investors sold ₹1,66,286 crore of Indian shares in 2025, while they invested ₹1,71,107 crore in 2023. The most significant selling occurred in 2022 when global tightening and geopolitical uncertainty led to ₹1,21,439 crore in outflows, while 2024 saw only modest net inflows of ₹427 crore as foreign investors adopted a cautious approach.
Despite the substantial outflows, experts maintain that India's fundamentals have not deteriorated in line with the outflow narrative. As reported by LiveMint, Gulati believes that FPI selling has compressed valuations in pockets of the market that deserve a second look. The weaker rupee, higher oil prices, and limited AI investment opportunities in India have all contributed to the risk-off sentiment, but these factors do not reflect fundamental weakness in the Indian market structure.
Market analysts suggest that the ₹1.9 lakh crore FPI outflow trend may reverse if certain conditions are met. According to LiveMint reports, Vijayakumar believes the AI trade is unlikely to last long as valuations reach unjustifiable levels. Gulati explains that when high-conviction AI stocks like Alphabet, Microsoft, Meta, and Nvidia are delivering compounding returns with perceived developed market safety, the calculus for emerging market risk becomes harder to justify. A correction in AI stocks could potentially reverse the trend of FPI selling in India, creating structural entry points for patient investors.
