Foreign portfolio investors (FPIs) have withdrawn close to $11 billion from Indian equities in March 2026, the largest monthly outflow on record. This sharp sell-off comes as global investors shift towards safer assets amid rising US Treasury yields and a sliding rupee, which has lost nearly 4% against the dollar this month. The rupee touched a record low of ₹94.78 per dollar, eroding returns for overseas investors and prompting heavy selling.
The Nifty 50 index fell nearly 17% in dollar terms, bringing valuations down to 17.4 times forward earnings, compared to the five-year average of 20 times. Analysts now expect a 2–3% cut in FY26 earnings estimates, reflecting weaker corporate outlook. Adding to the pressure, Brent crude crossed $100 per barrel as West Asia tensions escalated, raising fears of supply disruptions and higher import costs for India.
This sell-off is not limited to India. Taiwan saw $23 billion outflows, while South Korea lost $17.4 billion, showing a broader risk-off trend across Asia. As of mid-March, FPIs still held about $710 billion in Indian equities, accounting for nearly 15% of the market. However, experts warn that inflows may remain muted in the near term, with currency weakness and geopolitical risks weighing on sentiment.