Foreign Portfolio Investors (FPIs) continue to withdraw from the Indian stock market in the month of May. Due to global economic concerns, foreign investors have withdrawn more than ₹2 lakh crore from the market so far this year. According to NSDL (National Securities Depository Limited) data, foreign investors have sold ₹14,231 crore in May alone so far. More pressure this year compared to 2025 The total withdrawal so far in 2026 is significantly higher compared to the entire previous year. In 2025, foreign investors had withdrawn a total of ₹1.66 lakh crore from the Indian market. This year, this figure has already crossed ₹2 lakh crore, which reflects the continuous selling pressure on the market. Buying came only in February, record selling in March This year, the trend of foreign investors has mostly remained negative. In January, shares worth ₹35,962 crore were sold. However, February was an exception when investors invested ₹22,615 crore, which was the largest monthly investment in the past 17 months. But this gain could not sustain for long. March witnessed the biggest reversal so far and a record ₹1.17 lakh crore exited the market. Following this, a withdrawal of ₹60,847 crore was also recorded in April. Inflation and Interest Rates Became Major Reasons According to Himanshu Srivastava, Principal Manager Research at Morningstar Investment Research India, rising global inflation, apprehensions of changes in interest rates, and geopolitical risks are the main reasons for this sell-off. The ongoing tensions in the Middle East and high crude oil prices have increased inflation concerns. Due to this, investors are now giving up hopes of an early interest rate cut and are turning towards debt instruments of developed markets. Impact Also Increased Due to Rupee Weakness The volatility and weakness in the Indian rupee against the dollar is also a matter of concern for foreign investors. This affects their returns in dollar terms. V K Vijayakumar, Chief Investment Strategist at Geojit Investments, says that the rupee’s decline and concerns about India’s earning growth have played a major role in increasing outflows this year. Interest in Power Construction Sectors Despite continuous selling, foreign investors have not completely exited the market. They are still investing in select sectors like power, construction, and capital goods. Besides this, they are also buying mid-cap and some small-cap shares with strong earnings and good growth. However, globally, investors’ inclination is now shifting towards markets like South Korea and Taiwan, where better earnings are expected due to AI (Artificial Intelligence). What is FPI and Dollar Return
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