Foreign investors maintained their aggressive sell-off in Indian equities, withdrawing ₹48,213 crore (USD 5.14 billion) in the first 10 days of April, as rising geopolitical tensions and global macroeconomic uncertainties reduced risk appetite.

The sell-off follows a record outflow of ₹1.17 lakh crore (about USD 12.7 billion) in March, the worst monthly exodus on record. The sharp reversal comes after FPIs had infused ₹22,615 crore in February, marking the highest monthly inflow in 17 months.

With the latest withdrawals, total outflows by foreign portfolio investors (FPIs) have surged to ₹1.8 lakh crore in 2026 so far. In April alone, foreign investors withdrew equities worth ₹48,213 crore from the cash market till April 10, according to NSDL data.

Market participants attributed the sustained selling pressure to a combination of global macroeconomic headwinds and heightened geopolitical risks.

Himanshu Srivastava, Principal - Manager Research at Morningstar Investment Research India, noted that selling was largely driven by risk aversion triggered by escalating tensions in West Asia, which pushed up crude oil prices and revived concerns about inflation globally.

Echoing similar concerns, VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the energy crisis stemming from the West Asia conflict, coupled with the potential spillover impact on the Indian economy and continued depreciation of the rupee, has kept FPIs firmly in sell mode.

He also pointed out that markets such as South Korea and Taiwan are currently more attractive to FPIs, given their stronger earnings growth outlook compared to the relatively modest expectations for India in FY27.

Even the recent US-Iran ceasefire failed to arrest the selling momentum.

"FPIs used the relief rally as a liquidity window to exit further," said Vaqarjaved Khan, Senior Fundamental Analyst at Angel One.

According to Khan, a reversal in flows would depend on three key factors -- credible reopening of the Strait of Hormuz, stabilisation of the rupee, and a positive surprise from India's Q4 earnings season.

"Flows can reverse quickly, but only if macro conditions begin to support the shift," he added.

Published on April 12, 2026