Foreign institutional investors have cut their holdings in India’s top ten bluechip companies by nearly half in four years. Their share fell from 40.9% in March 2022 to 21.3% in March 2026. This shows a clear shift of capital towards Taiwan and South Korea where artificial intelligence opportunities are expanding faster.
HDFC Bank and HDFC Ltd together dropped from 11.6% to 6.9%. Reliance Industries fell from 9.1% to 5.3%. Infosys shrank from 5.8% to 2.1% while TCS slipped from 4.2% to 1.3%. Consumer favourites such as Asian Paints and Hindustan Unilever now form less than 1% of foreign portfolios.
Analysts highlight three main reasons. India’s weight in the MSCI Emerging Market Index reduced from 20% to 12%. The rupee weakened by 27–28% in four years, cutting dollar returns to low single digits while the S&P 500 delivered 60%. Indian equities trade at premium valuations of 20–21 times forward earnings with only 10–12% growth prospects.
Despite this retreat, experts note fresh inflows in recent sessions. They believe the worst of the outflows may be behind and that tactical re‑entry is beginning. However, they caution this is not yet a full comeback but a cautious repositioning.
