In the first fortnight of March, foreign portfolio investors (FPIs) have made huge withdrawals from the Indian stock market. According to depository data, in the first 15 days of March, FPIs withdrew about Rs 52,704 crore from the Indian market. According to experts, the main reasons behind this are the increasing geopolitical tension in West Asia, weakness of the rupee and high prices of crude oil.
Due to these reasons, the possibility of pressure on India’s economic growth and companies’ earnings has increased. However, earlier in February, FPI had invested Rs 22,615 crore in the Indian market, which was the highest level in the last 17 months.
Selling was seen in the last months also
According to depository data, foreign investors have also withdrawn money from the Indian market in recent months. In January, FPI withdrew Rs 35,962 crore and before that in December 2025, it withdrew Rs 22,611 crore. There was a sale of about Rs 3,765 crore in November 2025 and now once again a big sale by foreign investors is being seen in March.
expert opinion
Market experts say that the biggest reason for the current selling is the increasing tension in West Asia. According to Waqar Javed Khan, Senior Fundamental Analyst of Angel One, the fear of conflict in West Asia and uncertainty regarding the important sea route Hormuz Strait has increased the prices of crude oil. Due to this, Brent crude has crossed $ 100 per barrel. Along with this, the rupee has also weakened and remains around 92 per dollar. Due to increase in bond yields, foreign investors are also withdrawing money from the market.
Other markets are attractive instead of India
V.K., Chief Investment Strategist, Geojit Investments. Vijayakumar says that West Asia tension, weakness of rupee and high oil prices have affected the sentiment of FPI. According to him, in the last 18 months, returns from India have been relatively weak compared to developed and emerging markets. This is the reason why foreign investors are currently considering markets like South Korea, Taiwan and China more attractive.
How is the future outlook?
However, experts believe that this sell-off by FPI cannot continue for long. The good thing is that after heavy selling in financial stocks, valuations have now become more attractive for domestic investors. According to Waqar Javed Khan, the outlook for the market in the second half of March remains cautious. If tensions in West Asia ease or Q4 earnings from the banking and consumption sectors are better than expected, outflows from foreign investors may reduce. However, if oil prices rise further or global uncertainty increases, selling pressure in the market may increase further.