Foreign investors withdraw ₹44,166 crore from Indian markets in Oct:2026 outflows cross ₹3 lakh crore on back of US bond yields crude price rise

Foreign investors have continued withdrawing money from the Indian share market. In October, they have so far withdrawn ₹44,166 crore from the equity market. As a result, the total net outflow by FPIs in 2026 has now risen to more than ₹3.04 lakh crore. High crude oil prices, a strengthening US dollar and rising yields on 10-year US bonds are the main reasons behind this withdrawal by foreign investors. In addition, the rally in artificial intelligence (AI)-related companies in North Asian markets is also attracting foreign investors. Selling continued in October after September According to NSDL data, before the outflow in October, foreign investors had also sold shares worth ₹35,861 crore in September. Before that, FPIs invested ₹20,200 crore in Indian shares in July and ₹29,631 crore in August. Withdrawals of ₹3.04 lakh crore so far in 2026 are nearly double the total ₹1.66 lakh crore withdrawn in 2025. This Is Not About India, But Global Repositioning: Vedant Gupte Vedant Gupte, co-founder and chief executive officer of investment platform Trackk, said the selling by foreign investors should not be viewed as a sign of a poor investment environment in India, but as a process of reallocating their money across markets worldwide. Vedant Gupte said crude prices have remained elevated due to Gulf supply risks, while a strong dollar and US yields are drawing money towards safe-haven assets. At the same time, FPIs are chasing the AI rally in North Asian markets, where valuations currently appear cheaper. He further said domestic institutional investors (DIIs) and retail investors have absorbed much of the selling pressure. This shows that the foundations of the Indian market are considerably stronger than the selling figures suggest. Nifty Down 13.87% This Year: VK Vijayakumar VK Vijayakumar, chief investment strategist at Geojit Investments Limited, said that FPI selling was the main reason behind the Indian market’s weak performance this year. So far in 2026, the Nifty has delivered a -13.87% return. Vijayakumar said that the risk-free return on 10-year US government bonds has remained above 5.2%, making it no big deal for foreign investors to withdraw money from India. FPI selling may continue as long as US bond yields remain high. This situation will change when Indian equities become attractively valued. Foreign Investors Also Withdrew Money from the Debt Market Along with equities, foreign investors also sold in the debt market. In September, FPIs withdrew ₹1,921 crore through the Fully Accessible Route (FAR) and ₹233 crore through the Voluntary Retention Route (VRR), while investing ₹4,729 crore through the General Route. What Are FPI and FAR?