Foreign investors pull $5bn from India funds, assets drop 19.5%
Foreign investors yanked $5 billion from India-focused offshore funds and ETFs in the March 2026 quarter, a sharp jump from last quarter's $1.8 billion, says Morningstar.
This led to a 19.5% drop in fund assets to $77 billion, with the Nifty 50 index also sliding 14.5%.
AI-driven markets draw investor flows
Most of the money left U.S.- and Luxembourg-based Indian funds, as global investors are chasing big gains in AI-driven markets like South Korea and Taiwan.
Manish Bhandari, chief executive and portfolio manager at Vallum Capital, points to strong earnings in those markets, plus worries about oil prices and global tensions affecting India.
Experts like Ashwin Patni say this is more about short-term rebalancing than losing faith in India. Macroeconomic stability and falling oil prices could turn things around if earnings improve globally.