Foreign portfolio investors have pulled nearly ₹21,000 crore from Indian equities in September, citing global risk factors like US bond yields, crude prices, and a falling rupee, marking a significant reversal from earlier months.
Foreign portfolio investors have turned cautious again, pulling ₹20,974 crore from Indian equities so far in September as global uncertainty, firmer US bond yields, elevated crude prices and a weaker rupee weighed on sentiment.
The latest retreat marks a sharp reversal from July and August, when foreign investors returned to Indian shares with net purchases of ₹20,200 crore and ₹29,630 crore, according to data from CDSL. By September 18, the month’s equity outflow had already pushed foreign selling in 2026 to ₹2.45 lakh crore, above the ₹1.66 lakh crore withdrawn in the whole of 2025.
Market strategists said the pullback reflects a broader shift in global risk appetite rather than anything specific to India. Dheeraj Gaur, chief investment strategy officer at Choice Wealth, pointed to three pressure points: higher US rates and yields, crude oil holding at elevated levels because of geopolitical tensions, and weakness in the rupee. Vedant Gupte, co-founder and chief executive of investment platform Trackk, told Reuters-style commentary that the selling was “a crude-and-dollar story, not an India story”, arguing that rising oil and stronger US yields tend to push money out of emerging markets more broadly.
The rupee has added to the discomfort for overseas investors, after falling 1.1% in the previous week to a record low of 95.92-95.96 per dollar and briefly crossing the 96 mark intraday. V K Vijayakumar, chief investment strategist at Geojit Investments, said the outlook for flows will be shaped by the Iran-US conflict and its effect on oil prices, as well as the US 10-year yield at 5%. He added that India’s resilient economy and expectations of stronger earnings remain counterweights. Foreign investors also sold debt during the period, withdrawing ₹10,296 crore through the Fully Accessible Route, ₹1,817 crore via the Voluntary Retention Route and ₹1,068 crore through the general route.
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