Foreign Investors Sell Record $11.7 Billion Indian Equities in March Amid War Concerns

Foreign investors have sold a net $11.7 billion worth of shares in Indian equities in March 2026, which is the highest ever, according to Bloomberg data as of March 25.

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The outflows have pushed total foreign selling in 2026 to over $13 billion, nearing levels seen during the same period last year.

Record Outflows From Indian Markets

The decline in March represents the largest monthly net outflow of foreign investment from Indian equities on record, Bloomberg data showed.

The larger picture is of sustained foreign outflows, with over $34 billion of assets withdrawn from Indian equities in the two years to March 2026. Indian equities have trailed regional peers in six of the last eight quarters, MSCI data showed.

Global Risk-Off Sentiment And Energy Prices

The sell-off coincides with a wider retreat from emerging Asian markets. Global funds have withdrawn about $52 billion from emerging Asian equities, excluding China, since the onset of the Iran conflict, according to Bloomberg data.

Rising crude oil prices have added pressure on oil-importing economies such as India. Brent crude prices have remained elevated amid ongoing geopolitical tensions in West Asia, according to Reuters.

Domestic Investors Provide Support

Domestic institutional investors have offset part of the foreign selling, investing more than $13 billion into Indian equities in March, according to Bloomberg data.

Yet, the benchmark indices have continued to face pressure due to sustained foreign outflows and global uncertainties.

Currency And Market Volatility

The sustained foreign outflows are accompanied by currency and market volatility. The Indian rupee has weakened in recent times due to global uncertainties, whereas the NSE Volatility Index has touched a four-year high, as per market data.

The activities of foreign investors in India are still influenced by global risk conditions and changes in oil prices. In March 2026, the Indian stock market witnessed the highest outflow.