FPIs are on sale; In January from equity Rs. 22,530 crore was withdrawn

So far this month, foreign portfolio investors have pulled Rs. 22,530 crore (USD 2.5 billion), has withdrawn, amid rising US bond yields and a stronger dollar, continuing their selling streak from last year.

In 2025 registered Rs. This was due to concerns over volatile currency movements, global trade tensions and potential US tariffs and stretched market valuations, following an outflow of 1.66 lakh crore (USD 18.9 billion).

This sustained selling pressure by foreign portfolio investors (FPIs) has contributed significantly to the rupee depreciating by around 5 per cent against the dollar through 2025.

According to NSDL data, between January 1 and 16, FPIs withdrew Rs. 22,530 crore has been withdrawn.

Market experts attributed the continued withdrawal to a combination of global and domestic factors.

“Rising US bond yields and a stronger dollar have improved risk-adjusted returns in developed markets, spurring capital reallocation from emerging markets,” said Sachin Jasuja, head of equities and founding partner, Centricity WealthTech.

Echoing similar sentiments, Himanshu Srivastava, principal-manager research at Morningstar Investment Research India, said elevated US bond yields and dollar strength made US assets relatively more attractive.

He added that geopolitical and trade-related uncertainties are weighing on emerging market risk appetite.

According to VK Vijayakumar, chief investment strategist at Geojit Investments, uncertainty over the US-India trade deal has also dampened investor sentiment.

On the domestic front, relatively rich valuations in certain segments of the market, coupled with mixed signals from the ongoing earnings season, led to profit-taking and portfolio rebalancing by foreign investors.

Continued depreciation of the rupee, down nearly 5 percent in 2025 and recently weakened further to around 90.44 per dollar, has reduced dollar returns despite stable index levels, adding further pressure on FPI inflows.

Vijayakumar said the selling trend may continue until clear positive triggers emerge for a sustained market rally. He added that AI-led trading, which dominated the markets in 2025, took off in early 2026, although the trend could reverse later in the year.