As of Sunday, March 15, 2026, foreign portfolio investors (FPIs) have intensified their selling in the Indian markets, offloading ₹52,704 crore (approx. $5.7 billion) in the first two weeks of March.
The specific figure of ₹39,450 crore cited in recent market reports refers to the massive outflow recorded during the last five trading sessions alone (the week ending March 13), marking the most aggressive weekly exit by foreign funds since January 2025.
The “Flight to Safety” Breakdown
The selling reached a fever pitch on Friday, March 13, which witnessed the highest single-day FPI outflow of 2026 at ₹10,717 crore.
| Period | FPI Net Selling (Equity) | Status |
| Mar 2 – Mar 6 (Week 1) | ₹20,880 Crore | Escalating regional tensions. |
| Mar 9 – Mar 13 (Week 2) | ₹31,824 Crore | Friday alone saw ₹10.7k Cr exit. |
| Total March so far | ₹52,704 Crore | Worst month since Jan 2025. |
Primary Reasons for the Exodus
Analysts at Geojit and Kotak Securities have identified a “perfect storm” of geopolitical and macroeconomic factors driving this risk-off sentiment:
- The West Asia Conflict: The U.S.-Israel-Iran war is the primary trigger. The escalating strikes have pushed investors away from emerging markets toward “safe havens” like the US dollar and Treasury bonds.
- The “Strait of Hormuz” Effect: Fears that a prolonged blockade will keep Brent crude prices above $100 per barrel directly threaten India’s fiscal deficit and corporate earnings, making Indian stocks a “tactical sell.”
- Rupee at All-Time Lows: The rupee has plummeted past the ₹92.40 mark against the dollar this week. For dollar-based investors, this depreciation erodes the value of their Indian holdings, triggering automated sell-offs.
- Relative Valuation: Even after the recent 8–9% correction in the Nifty and Sensex, Indian valuations remain high (PE > 23x) compared to markets like China, South Korea, and Taiwan, prompting FPIs to rotate funds into cheaper Asian peers.
The “DII Cushion”
Despite the record selling by foreign funds, Indian benchmark indices have avoided a total freefall due to the “structural strength” of domestic buyers.
- DII Absorption: Domestic Institutional Investors (DIIs) were net buyers of nearly ₹37,740 crore during the same one-week period.
- SIP Power: Steady monthly inflows from Systematic Investment Plans (SIPs) are providing the liquidity for mutual funds to absorb the FPI sell-orders.
- Friday Defense: On the same day FPIs sold ₹10,717 crore, DIIs stepped in to buy ₹9,977 crore, limiting the Nifty’s decline to roughly 2%.
Sectoral Casualties
The selling has been most prominent in sectors where FPI ownership is highest:
- Financial Services (Banks/NBFCs): Parred significantly due to global risk-off.
- Auto & Metals: Hit by fears of supply chain disruptions and higher energy costs.
- IT Services: Under pressure due to margin concerns and the lack of domestic “AI-pure plays” compared to the US market.
