FPI Outflows From FAR Bonds Hit ₹17,689 Crore As Yields Rise Above 7%
5paisa Capital Ltd
- 2 min read
Last Updated: 2nd April 2026 - 06:22 pm
Summary:
Foreign portfolio investors have withdrawn ₹17,689 crore from Fully Accessible Route government securities from February 27 to April 1 due to an increase in bond yields and crude oil prices due to the West Asia conflict.
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Foreign portfolio investors (FPIs) have withdrawn ₹17,689 crore from Fully Accessible Route (FAR) government securities since February 27, indicating a fall in investments in Indian bonds.'
Invest in Indian Markets and Unlock Future Potential With 5paisa!According to the Clearing Corporation of India (CCIL), investments by FPIs in FAR government securities have fallen to ₹3,13,318.661 crore as of April 1 from ₹3,31,007.648 crore on February 27.
Bond Yields Climb Above 7%
The outflows coincided with an increase in domestic bond yields. The yield on the 10-year benchmark government bond rose by about 0.33% during the period, crossing the 7% mark on March 27, the highest level recorded in over 20 months, based on market data. The rise in yields is a result of continuous selling pressure in the bond market for all investors.
Impact Of Global Oil Prices
The movement in yields and investors’ flows was triggered by a jump in global crude oil prices following geopolitical tensions in West Asia. Higher crude oil prices have led to worries about inflation and financial conditions in emerging markets, according to Reuters.
Elevated inflation expectations typically influence bond yields, leading to adjustments in investor portfolios.
FAR Route And Investor Participation
Government securities under the FAR route are accessible to overseas investors without investment caps. These instruments form a key segment for foreign investment in Indian debt markets.
The recent decline in holdings indicates a steady unwinding of positions by FPIs in this category during the period under review.
Market Positioning
As indicated in the report presented by HDFC Bank, the yield of the 10-year government bond was seen to be in the range of 6.90% to 7.20% in the near term.
The changes in the levels of FPI investment and bond yields simply show the adjustments in the markets.
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