Foreign Portfolio Investors (FPIs) have withdrawn ₹21,000 crore from Indian equities in just four trading sessions between March 2 and 6, 2026. The sharp reversal, triggered by escalating tensions in West Asia, contrasts with February’s record inflows and signals renewed volatility in Indian markets.
Indian equity markets have come under pressure as FPIs turned aggressive sellers, pulling out ₹21,000 crore in a matter of four trading sessions. The sudden reversal is directly linked to heightened geopolitical uncertainty in West Asia, which has pushed global investors toward safer assets and away from emerging markets like India.
This development is particularly striking given that February saw the highest monthly inflows in 17 months, with FPIs investing ₹22,615 crore into Indian equities. The latest sell-off underscores how quickly foreign capital flows can shift in response to global shocks, despite India’s strong domestic fundamentals.
Key Highlights
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Foreign investors withdrew ₹21,000 crore (USD 2.3 billion) between March 2–6, reflecting sharp risk-off sentiment.
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The withdrawals coincided with escalating geopolitical tensions in West Asia, which have rattled global markets.
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February witnessed record inflows of ₹22,615 crore, marking the strongest monthly infusion since October 2024.
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Prior to February, FPIs were net sellers for three consecutive months: ₹35,962 crore in January, ₹22,611 crore in December, and ₹3,765 crore in November.
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Analysts caution that if the West Asia conflict persists, volatility in Indian equities could intensify further.
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Despite strong domestic growth prospects, external shocks continue to dictate foreign investor sentiment.
The sharp FPI outflows highlight the vulnerability of Indian markets to global geopolitical events. While India’s fundamentals remain robust, the ongoing West Asia conflict has triggered a wave of risk aversion, reminding investors of the fragile balance between domestic strength and external uncertainty.
Sources: Mint, Business Standard, The Week