Foreign investors have withdrawn more than USD 20 billion from Indian equities in the first four months of 2026, surpassing the record annual outflow seen in the whole of last year, as rising crude oil prices linked to the Iran conflict weakened sentiment towards India.
According to data from the National Securities Depository, nearly USD 19 billion of the outflows came after the Iran war began.
In comparison, total foreign outflows from Indian equities stood at USD 18.9 billion during 2025.
India, which imports around 90 per cent of its energy requirements and remains heavily dependent on Middle Eastern oil supplies, is among the economies most exposed to the ongoing energy shock, analysts said.
The Nifty 50 and BSE Sensex have declined 8.2 per cent and 9.8 per cent, respectively, so far in 2026, underperforming broader Asian and emerging market peers.
The Indian rupee has also weakened to record lows against the US dollar amid sustained capital outflows and rising oil prices.
Financial stocks witnessed the highest selling pressure, with foreign outflows amounting to Rs 79,981 crore, followed by information technology stocks, which saw withdrawals of around Rs 22,000 crore.
Analysts said sentiment towards information technology companies has weakened due to concerns around artificial intelligence-led disruption and slower global technology spending, contributing to a broader market derating.
Despite the foreign selling, strong domestic institutional participation has helped stabilise markets.
Domestic institutions purchased a record USD 15.4 billion worth of equities in March, offsetting the highest-ever monthly foreign outflow of USD 12.7 billion during the same period.
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