Our Bureau
Mumbai
In one of the longest selling sprees in recent history, foreign institutional investors (FIIs) have pulled out more than USD 45 billion (approximately Rs 4.23 lakh crore) from the Indian stock market in the last 18 months, assuming an exchange rate of $1 = Rs 94.
The outflow marks a severe downturn for Indian capital markets. In 2025 alone, FIIs net sold equity worth Rs 166,283 crores, the highest annual outflow ever recorded in the Indian capital market. The trend has continued into 2026, with FIIs selling over $5 billion between April 1 and April 23, 2026, even after the Middle East ceasefire announcement.
Instead of returning to India, foreign investors are favouring other markets. During the same April period, FIIs allocated roughly $4 billion to Korea and over $5.5 billion to Taiwan. This divergence has surprised even seasoned market observers.
“What is particularly intriguing is what has happened post April 1, 2026. Following the ceasefire announcement in the Middle East and the subsequent recovery across emerging markets, one would have expected FII flows to turn positive for India,” said ArunaGiri, a market analyst.
The FII exodus aligns with poor market performance. The local benchmark indices, BSE Sensex and NSE Nifty, are down by 12-13% compared to their highs in September 2024. Historically, large FII outflows have been followed by strong inflow cycles, but that pattern has not yet repeated this time.
Domestic investors have tried to offset the selling. Yet, the massive selling has ensured frontline indices continue to end with sharp cuts.
