FPIs withdraw ₹7,600cr from Indian equities in 2 days
What's the story
Foreign portfolio investors (FPIs) have kicked off 2026 on a cautious note, pulling out ₹7,608 crore ($846 million) from Indian equities in the first two trading sessions. The withdrawal comes after a record outflow of ₹1.66 lakh crore ($18.9 billion) in 2025 due to volatile currency movements, global trade tensions and fears of US tariffs, as well as stretched market valuations.
Currency impact
Withdrawal impacts rupee's value
The sustained selling pressure by FPIs has contributed to the rupee's nearly 5% depreciation against the dollar in 2025. However, market experts are optimistic that things could change in 2026. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, said improving domestic fundamentals may start attracting net foreign inflows this year due to robust GDP growth and potential recovery in corporate earnings.
Market outlook
Analysts predict favorable conditions for foreign investors
Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, echoed similar sentiments. He said normalization in India-US trade relations, a benign global interest rate environment and stability in the USD-INR pair could create favorable conditions for foreign investors. Despite these positive expectations, FPIs have started 2026 cautiously by withdrawing nearly ₹7,608 crore from Indian equities between January 1 and 2.
Historical trend
FPIs's cautious approach in January
Khan also noted that foreign investors have been cautious in January, pulling out funds in eight of the last 10 years. This means FPI flows are likely to remain sensitive to global cues and macroeconomic developments. He added while high valuations were a key concern over the past year, that pressure appears to have eased for now, offering some room for optimism going ahead.