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India's FPI Holdings Hit 14-Year Low Amidst Foreign Sell-off
9 May
Summary
- Foreign portfolio investors' equity share in India is at a 14-year low.
- Domestic institutions now hold a larger stake in Indian equities than FPIs.
- India is losing emerging market allocations to South Korea and Taiwan.
Foreign Portfolio Investors' (FPIs) share of Indian equities has fallen to its lowest level in nearly 14 years, reaching 14.7% as of April 2026, a significant drop from 19.9% a decade prior. This decline has led to Domestic Institutional Investors (DIIs) becoming the larger stakeholders in India's stock market, holding 18.9% of equities. This represents a structural shift in market ownership.
The week ended May 8, 2026, saw continued foreign selling, with FPIs offloading ₹14,207.20 crore in equities. Year-to-date, FPI equity outflows through exchanges have reached ₹2,18,540 crore. Primary market investments by FPIs have remained positive, however, with ₹12,340 crore invested so far in 2026.
India appears to be losing out on emerging market allocations, with countries like South Korea and Taiwan attracting substantial foreign investment. Factors contributing to this include a global technology rally driven by AI, currency depreciation, and concerns over India's earnings growth. Despite the overall trend, FPIs have shown interest in specific sectors like power, construction, and capital goods, and have selectively invested in high-growth mid and small-cap stocks.
