FPI Outflows Lower in FY26: ₹1.5 Lakh Crore vs ₹2 Lakh Crore YoY (Jan 2026)

Foreign portfolio investors (FPIs) have continued to adjust their positions in the Indian equity market, with outflows totaling $16.7 billion (₹1.5 lakh crore) in the first ten months of the fiscal year 2026. Despite this, the outflow is lower than the $23.5 billion (₹2 lakh crore) recorded in the same period of the previous year.

FPI Activity in FY26

The current fiscal year has seen a mixed trend in FPI activity. A record high monthly outflow of $13.6 billion occurred in October 2024, but this was offset by a favorable first quarter of FY26, where FPIs invested $3.5 billion, compared to an outflow of a similar amount in the first quarter of FY25. January 2026 alone saw an outflow of nearly $4 billion, marking the third consecutive month of net selling.

Primary Market Investment Slows

While secondary market selling has slowed, investment in the primary market has also decelerated. FPIs invested $7.2 billion in initial public offerings (IPOs) and qualified institutional placements (QIPs) in the first ten months of FY26, which is nearly half the $13.3 billion invested during the same period last year. This shift may indicate waning interest from foreign investors due to relatively high valuations and opportunities in other emerging markets.

Did You Know? Domestic mutual funds have consistently invested in Indian equities, with a net investment of ₹4.2 lakh crore in the first ten months of FY26, mirroring the ₹4.1 lakh crore invested in the corresponding period of the previous year.

The total outflow from FPIs, including both primary and secondary markets, reached $9.5 billion in the ten months leading up to January 2026, a decrease from the $10.2 billion outflow recorded year-on-year. FPIs have been net sellers in six out of the ten months of the current fiscal year.

Expert Insight: The continued inflow of funds from domestic mutual funds is providing a counterbalance to the FPI outflows, suggesting a degree of resilience in the Indian equity market despite external pressures.

Frequently Asked Questions

What was the total FPI outflow in the first 10 months of FY26?

The total outflow of FPIs in the first 10 months of FY26 was $16.7 billion (₹1.5 lakh crore).

How does the current FPI outflow compare to the previous year?

The $16.7 billion outflow in the first 10 months of FY26 is significantly below the $23.5 billion (₹2 lakh crore) outflow in the comparable period of the previous year.

What has been the trend in primary market investment by FPIs?

Investment by FPIs in IPOs and QIPs has decelerated, reaching $7.2 billion in the first 10 months of FY26, nearly half of the $13.3 billion invested in the year-ago period.

As FPI activity continues to evolve, will domestic investment be sufficient to sustain market momentum?