FPIs withdraw ₹20,974cr from Indian equities this September
What's the story
Foreign portfolio investors (FPIs) have pulled out ₹20,974 crore from Indian equities in September. The withdrawal comes as a reversal from the inflows seen in July and August when FPIs had invested ₹20,200 crore and ₹29,630 crore, respectively. The recent outflow is attributed to global uncertainties like high US interest rates and bond yields, rising crude oil prices amid geopolitical tensions, and a weakening Indian rupee.
Market
Total outflow of ₹2.45L crore in 2026
With the September withdrawal, FPIs have pulled out a total of ₹2.45 lakh crore from Indian equities in 2026.
This is higher than the total outflow of ₹1.66 lakh crore for the entire year of 2025.
Despite this trend, the trend of FPI investment via the primary market has been continuing in the month.
Economic factors
Crude oil prices, US rates main reasons for FPI outflow
Analyst Dheeraj Gaur attributed the latest FPI selling to three main factors: high US interest rates and yields, rising crude oil prices amid geopolitical tensions, and a weakening Indian rupee.
The Federal Reserve has raised rates to 3.75-4.00%, making Indian assets less attractive due to the narrowing yield differential between India and the US.
Meanwhile, Brent crude has remained above $100 per barrel with escalating Middle East tensions adding inflationary pressure concerns on India's import bill.
Impact
'September's FPI selling is a crude-and-dollar story'
The Indian rupee has also come under pressure, falling 1.1% last week, the sharpest weekly fall in four months.
It hit a record low of 95.92-95.96 per US dollar and breached the 96-mark intraday, further worrying foreign investors.
"September's FPI selling is a crude-and-dollar story, not an India story," said Vedant Gupte, Co-Founder and CEO of investment platform Trackk, emphasizing that rising oil prices and firming US yields affect all emerging markets, including India.