Foreign Investment Flows – Sustained Outflows with Moderating Selling Pressure

24 Mar 2026 , 01:45 PM

Weekly Capital Flows Commentary: Mar 16 – Mar 20, 2026

Foreign portfolio investors recorded a net outflow of INR 362.9 billion during the week ended March 20, 2026, extending their selling streak to a third consecutive week. However, outflows moderated from the previous week’s sharper withdrawal of INR 443.04 billion. The outflow was primarily driven by heavy secondary-market equity selling, which outweighed limited primary-market inflows, while continued withdrawals across debt and mutual fund segments reinforced the negative trend, reflecting a cautious risk-off sentiment among foreign investors.

Equity Markets: Total equity flows for the week registered a net outflow of INR 301.98 billion, largely driven by substantial selling in the secondary market, which recorded withdrawals of INR 317.05 billion. This selling pressure overshadowed the modest primary market inflow of INR 15.07 billion, resulting in a sharp overall decline in equity flows. The continued dominance of secondary market outflows highlights sustained caution and profit-booking activity among foreign investors.

Debt and Alternative Segments: Debt instruments recorded net outflows of INR 55.11 billion, indicating reduced exposure to fixed-income assets. Mutual funds saw outflows of INR 8.22 billion, while hybrid instruments registered marginal inflows of INR 2.41 billion. Meanwhile, alternative investment funds (AIFs) reported no net movement during the week, highlighting continued caution across segments.

Table: FPI flows for the week

Asset Class	Net Investment (INR Billions)
Foreign_Investors	-362.9
Foreign_Investors.Debt	-55.11
Foreign_Investors.Equity	-301.98
Foreign_Investors.Equity.Primary	15.07
Foreign_Investors.Equity.Secondary	-317.05
Foreign_Investors.Mutual_Fund	-8.22
Foreign_Investors.Hybrid	2.41
Foreign_Investors.AIF	0.0

Source: NSDL

Table: Recent history of FPI flows

Week Ending	Net Investment (INR Billions)
20 Mar, 2026	-362.9
13 Mar, 2026	-443.04
06 Mar, 2026	-238.34
27 Feb, 2026	8.18
20 Feb, 2026	68.15
13 Feb, 2026	69.34
06 Feb, 2026	132.47
30 Jan, 2026	60.76
23 Jan, 2026	-50.27
16 Jan, 2026	-143.06

Source: NSDL

Figure: History of FPI flows

Source: NSDL

FPI flows in Equity

FPIs recorded net outflows from Indian equities during the week ended March 20, 2026, with total withdrawals of INR 302.0 billion. The negative balance was largely driven by heavy selling in the secondary market, which recorded net outflows of INR 317.1 billion, while the primary market saw modest inflows of INR 15.1 billion, offering only limited support to overall equity flows.

Compared with the previous week, which saw higher outflows of INR 361.8 billion, the latest week reflects a moderation in selling pressure. However, this marks the third consecutive week of outflows, contrasting with the net inflows observed during late January and February. The continued dominance of secondary market selling highlights sustained risk aversion among foreign investors, while primary market inflows have provided only a marginal offset to the broader negative trend.

Table: Recent history of FPI flows in equity

Week Ending	FPI.Equity	FPI.Equity.Primary	FPI.Equity.Secondary
20 Mar, 2026	-302.0	15.1	-317.1
13 Mar, 2026	-361.8	2.0	-363.8
06 Mar, 2026	-218.8	3.0	-221.8
27 Feb, 2026	4.8	14.7	-9.9
20 Feb, 2026	30.8	-0.4	31.2
13 Feb, 2026	19.4	24.0	-4.5
06 Feb, 2026	97.3	3.1	94.2
30 Jan, 2026	27.6	17.6	10.0
23 Jan, 2026	-97.4	5.5	-102.9
16 Jan, 2026	-116.0	5.2	-121.2

Source: NSDL

Figure: History of FPI flows in equity

Source: NSDL

FPI flows in Debt

The latest weekly data shows that foreign portfolio investors remained net sellers in Indian debt during the week ended March 20, 2026, recording outflows of INR 55.1 billion. This extends the ongoing selling trend and marks the third consecutive week of outflows, indicating a continued pullback in foreign participation in domestic fixed-income markets after a period of sustained inflows.

Recent flow patterns show that debt markets had witnessed consistent foreign inflows from late January through February before turning negative in early March. Compared to the previous week’s sharper outflow of INR 75.2 billion, the latest week reflects some moderation, though the trend remains negative. The continued outflows suggest growing caution among foreign investors toward Indian debt, reflecting a shift in overall risk sentiment and evolving global interest-rate expectations.

Table: Recent history of FPI flows in debt

Week Ending	Net Investment (INR Billions)
20 Mar, 2026	-55.1
13 Mar, 2026	-75.2
06 Mar, 2026	-13.2
27 Feb, 2026	29.3
20 Feb, 2026	38.1
13 Feb, 2026	51.4
06 Feb, 2026	43.4
30 Jan, 2026	33.2
23 Jan, 2026	43.0
16 Jan, 2026	-26.5

Source: NSDL

Figure: History of FPI flows in debt

Source: NSDL