FPIs withdraw Rs 20,974 crore from Indian equities in September amid global uncertainty

Foreign Portfolio Investors (FPIs) have become cautious again, withdrawing Rs 20,974 crore from Indian stocks this September due to global uncertainties, rising US interest rates and bond yields, high crude oil prices, and a depreciating rupee.

The latest outflow follows the return of foreign investors to Indian stocks in July and August, during which they invested Rs 20,200 crore and Rs 29,630 crore, respectively, as per CDSL data.

Following the September sales, FPIs have withdrawn Rs 2.45 trillion from Indian equities in 2026, exceeding the Rs 1.66 trillion outflows noted throughout 2025.

As per the data, FPIs pulled out Rs 20,974 crore from Indian stocks this month, up to September 18. Nonetheless, the pattern of FPI investment via the primary market has persisted throughout the month.

On September 7, the Securities and Exchange Board of India (SEBI) had eased regulatory compliance requirements for FPIs investing exclusively in government securities, removing the need for such investors to furnish investor group details.

The move, effective immediately, was aimed at providing greater ease of investment to FPIs and follows changes introduced by the Reserve Bank of India (RBI) in June.

Under the revised framework, “FPIs investing only in Government Securities shall not be required to furnish investor group details,” SEBI had said in a circular.

Earlier, on July 27, the government had said the recent withdrawal of FPIs from Indian equities was part of a broader trend across emerging markets and was “not altogether specific to India,” attributing the movement to a mix of global and domestic factors.

In a written reply in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary had said, “The recent foreign portfolio outflows from Indian equities are part of a broader pattern noticed in emerging markets and not altogether specific to India.”