From oil prices to war zones: Why global risks shape your investments now
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Global risks, particularly geopolitical tensions in the Strait of Hormuz, are significantly impacting investments in India, with foreign portfolio investors pulling out a record $12.3 billion in March 2026. The country's heavy reliance on oil imports and exposure to trade disruptions make it especially vulnerable to such shocks, affecting its economy, currency, and inflation rates.
The Strait of Hormuz, a key oil shipping route, has become a geopolitical flashpoint, affecting global markets. In March 2026, foreign investors pulled out $12.3 billion from Indian equities, the largest monthly outflow on record. India's economy is heavily exposed to oil price shocks, with nearly 85-90% of its crude oil requirements imported, mostly through the Strait of Hormuz. The recent crisis led to a surge in oil prices, a weakening rupee, and inflation concerns. The Indian government responded by cutting excise duties on petrol and diesel. Global financial institutions have turned cautious on Indian equities, highlighting the significant impact of geopolitical risks on domestic markets.
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