Foreign investors continue to withdraw money from the Indian stock market. Foreign investors withdrew a total of Rs 49,340 crore from the domestic stock market in June. Selling was mainly due to global risk aversion, preference for developed markets and rise in US bonds and overvaluation in the domestic market.
Central Depository Services (India) Ltd. According to the data, with this latest withdrawal, foreign portfolio investors (FPIs) have withdrawn a total of Rs 2.7 lakh crore from the Indian equity market so far in 2026. This is much more than the amount of Rs 1.66 lakh crore withdrawn in the entire year 2025.
Record made in March
Data shows that FPIs remained net sellers in every month of 2026 except February. They withdrew Rs 35,962 crore in January, while they became net buyers in February and invested Rs 22,615 crore, the highest monthly inflow in 17 months. However, foreign investors withdrew a record Rs 1.17 lakh crore in March. Selling pressure continued with net withdrawals of Rs 60,847 crore in April and Rs 32,963 crore in May. FPI withdrew Rs 49,340 crore in June.
Why are foreign investors not investing money in Indian market?
Himanshu Srivastava, head, manager research, Morningstar Investment Research India, said the outflows in the first fortnight of June were mainly due to global risk aversion, preference for developed markets, higher US bond yields and concerns over valuations of Indian equities. However, geopolitical risks reduced in the second fortnight of June following positive developments regarding the peace agreement between the US and Iran. This helped in reducing some uncertainty in global markets and improving crude oil prices. This improved risk perception and reduced concerns about sudden spikes in energy prices. As a result, the pace of FPI selling slowed down at the end of the month. However, this was not enough to compensate for the massive capital outflows that had occurred earlier.
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