FPIs Flee India: Investors Pull Out Billions Amid Global Chaos!

Foreign Portfolio Investors (FPIs) have continued to withdraw significantly from Indian equities, with Rs 14,231 crore pulled out in May due to persistent global macroeconomic uncertainties and inflation concerns. This brings the total outflow for 2026 to over Rs 2 lakh crore. The sustained selling is primarily linked to global economic uncertainties, including worries about inflation, interest rates, and geopolitical risks. Elevated crude oil prices and West Asian tensions are also fueling inflation fears, leading investors to reconsider expectations of near-term rate cuts by central banks. Despite the overall selling, FPIs have selectively invested in sectors like power, construction, and capital goods, with a growing preference for mid-cap and select small-cap stocks. Currency depreciation and concerns over India's earnings growth are also contributing factors. Markets like South Korea and Taiwan are attracting FPI flows due to the artificial intelligence boom. FPIs were net sellers in all months of 2026 except February. They withdrew Rs 35,962 crore in January before investing Rs 22,615 crore in February. However, the trend reversed in March, with a record Rs 1.17 lakh crore withdrawn. The selling continued in April with an outflow of Rs 60,847 crore and extended into May. Himanshu Srivastava from Morningstar Investment Research India noted that global interest rate trajectory uncertainty remains a key factor. V K Vijayakumar from Geojit Investments added that currency depreciation