FPIs pull out nearly Rs 43,000 Crore from Indian equities in June amid global AI shift

Foreign portfolio investors (FPIs) pulled out nearly ₹43,000 crore from Indian equities in the first week of June 2026, accelerating total outflows for the year to ₹2.67 lakh crore, surpassing the entire 2025 withdrawal of ₹1.66 lakh crore. According to National Securities Depository Ltd (NSDL) data, FPIs have been net sellers in all months of 2026 except February, when they invested ₹22,615 crore—the highest inflow in 17 months. The trend reversed sharply in March with a record ₹1.17 lakh crore outflow, followed by withdrawals of ₹60,847 crore in April and ₹32,963 crore in May. Market experts link the exodus to weak earnings growth, a depreciating rupee (down nearly 6% in 2026 and 10% over the past year), and global capital reallocation toward AI and technology stocks, including anticipated SpaceX and AI company IPOs. The Reserve Bank of India (RBI) and government have introduced measures to stabilize flows, such as tax exemptions on FPI investments in government securities, expanded forex swap windows, and higher investment limits for NRIs and OCIs in Indian equities. However, sustained recovery depends on cooling AI-driven global investment trends, as indicated by the Nasdaq’s June 5 decline. FPI outflows are critical for India’s current account deficit and balance of payments, making the trend a key concern for policymakers. While recent steps aim to reverse the trend, the persistent global AI shift remains a major hurdle for attracting foreign capital back to Indian markets.