Foreign institutional investors have sold shares in India’s secondary markets at a rate of more than Rs 400 crore per trading hour in 96 trading sessions so far in 2026. This is more than double the pace of Rs 161 crore per hour recorded in 241 trading sessions during the entire calendar year of 2025. Overall, FIIs have sold shares worth more than Rs 2.54 lakh crore in the secondary markets so far in 2026. This is already more than the shares worth about Rs 2.4 lakh crore sold in the entire year of 2025, while there are still seven months left in this year. According to NSDL data, selling accelerated since March, when FIIs sold shares worth about Rs 1.27 lakh crore. After this, shares worth about Rs 50,800 crore were sold in April and about Rs 54,000 crore in May.
Effect of crude oil prices
This latest round of selling has started due to increasing geopolitical tension after the US-Iran conflict. This tension has pushed crude oil prices above $100 per barrel and raised concerns about inflation and trade. Analysts say that high crude oil prices could have a negative impact on India’s earnings estimates, because the country is heavily dependent on energy imports. Global funds are also becoming more attracted towards AI-related stocks in America, Taiwan and South Korea, while India’s limited presence in the field of AI has reduced the interest of investors. Due to reduction in India’s weightage in MSCI index, the pressure on foreign investment has increased further.
How much money have you withdrawn so far?
In 2025, FIIs’ selling was mainly due to high valuations of stocks, slow earnings growth and global trade concerns. Analysts say that the current round of selling has become even more aggressive due to the fall of the currency and low expectations of returns from Indian markets. Despite heavy selling in secondary markets, FIIs have invested Rs 15,473 crore in primary markets so far in 2026. However, capital raising activities remained slow as many companies delayed launching their IPOs due to weak market conditions. In comparison, FIIs had invested Rs 73,914 crore in the primary market throughout the year 2025. In 2023, FIIs sold shares worth Rs 1.29 lakh crore in the secondary market, while in the same year they invested Rs 1.21 lakh crore in the primary market.
The challenge may continue further
Independent market analyst Ambrish Baliga said that the sharp fall in the rupee has further hurt the returns of foreign investors, due to which funds are turning to other markets. He said easing of capital gains tax and improving corporate earnings could help bring back foreign investment in Indian equities, but cautioned that the next few quarters could remain challenging due to the impact of inflation caused by rising energy prices. Analysts warned that foreign selling pressure may increase further as shares worth about Rs 2.3 lakh crore of 11 newly listed new-age companies will become available for trading between May and August after the pre-listing lock-in period ends.
What do experts say?
Concerns have also increased after the Meteorological Department reduced the forecast for the south-west monsoon of 2026. Analysts said that below normal rainfall could increase inflation and further damage corporate profits. Experts said crude oil prices around $80 per barrel are manageable for India, but going above $90 could put pressure on margins across all sectors and cut earnings estimates.
Dhananjay Sinha, CEO of Systematics Group and co-head of institutional equities, said in a Money Control report that FIIs have been continuously reducing their investments in India for the last several years, and the pace of selling has intensified in recent months. He said that compared to other markets, low returns, high valuations, slow growth expectations and falling rupee have made Indian equities less attractive for foreign investors.
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