In September, FPIs pulled Rs 35.9 crore from Indian equities, after a July outflow of Rs 20.2 crore and an August 29.6 crore. The trend has accelerated, with October’s Rs 44.2 crore drain taking 2026 cumulative outflows to Rs 3.04 lakh crore, a stark jump from Rs 1.66 lakh in 2025.
Vedant Gupte, co‑founder and CEO of Trackk, told PTI that the selling should be seen as a global shift in capital allocation rather than an indictment of India’s prospects. He added that “high crude prices, a firmer dollar and US yields pulling money back to safer ground” are the main drag factors, and that the market has shown resilience in absorbing domestic flows.
VK Vijayakumar, chief investment strategist at Geojit, said heavy FPI selling is the primary reason for the market’s underperformance this year. The Nifty’s YTD 13.87% decline reflects a risk‑free return on 10‑year US Treasury bonds hovering above 5.2%. He warned that as long as yields stay elevated, FPI will keep pulling out.
The outflows extended to debt as well: FPIs withdrew Rs 1.92 crore via the Fully Accessible Route and Rs 0.23 crore through the Voluntary Retention Route, while investing Rs 4.73 crore through the general route. The net effect still leans heavily toward selling.
Looking ahead, analysts say a decline in US bond yields below 5% could reverse the capital flight, turning valuations in India more attractive. Meanwhile, domestic investors have absorbed the selling pressure, keeping the market from cracking further.