Foreign investors have pulled $21 billion out of Indian stocks in the last two months, putting 2026 on track to be the worst year for outflows since the markets opened to overseas investment in 1993.

Investors are instead looking to South Korea and Taiwan, where stocks are booming on the back of AI chip demand.

India has also been hit especially hard by the ripple effects of the Iran war, with New Delhi recently urging Indians to travel less and stop buying gold. The rupee has weakened considerably.

Adding to the markets’ pain: The digital arm of Reliance Industries is now rethinking its IPO, which was set to let existing investors cash out, but will instead be a fresh share sale to avoid worsening outflows.