By BullScreen Editorial Team 
Foreign institutional investors (FIIs) have withdrawn more than ₹1 lakh crore from India’s secondary markets in just 16 trading sessions, marking one of the sharpest phases of capital outflows in recent years. The sustained selling comes amid escalating geopolitical tensions in the Middle East, which have driven up crude oil prices and heightened concerns around macroeconomic stability.
Between February 26 and March 20, FIIs offloaded equities worth ₹1,00,040 crore. Spread across roughly six trading hours per session, this translates to an average outflow of nearly ₹1,000 crore every hour. So far in 2026, foreign investors have been net sellers in 33 out of 50 trading sessions, underscoring persistent risk aversion.
Market participants attribute the selling pressure to a mix of global and domestic factors, including rising oil prices, rupee depreciation, and shifting global capital flows. Increasing investor focus on high-growth sectors such as artificial intelligence and cryptocurrencies in developed markets has also diverted funds away from emerging markets like India.
FII assets under custody declined to a 13-month low of ₹65.63 lakh crore as of mid-March, while their share in Indian equities dropped to 15.3 percent. Analysts note that currency depreciation has further amplified losses for foreign investors, creating a cycle of continued outflows.
Despite strong domestic institutional investor (DII) support amounting to a record ₹1.16 lakh crore of inflows, the selling pressure has weighed on markets. Benchmark indices Sensex and Nifty have fallen over 10 percent during this period.
Analysts say a sustained recovery in foreign inflows will depend on stabilizing oil prices, improved currency trends, and clearer global economic signals.