Mumbai: Foreign Portfolio Investors (FPIs) have begun the new year on a cautious and negative note. In the first two trading sessions of January 2026, they pulled out Rs 7,608 crore from Indian equity
markets. This shows that foreign investors are still worried about global and domestic factors, even though a new year has started.
According to market data, the selling took place on January 1 and January 2. The outflow comes after a difficult year in 2025, when FPIs withdrew a record Rs 1.66 lakh crore from Indian equities. This large exit was mainly due to global uncertainty, weak currency movements, trade tensions, and concerns about possible tariff actions by the United States.
2025 Outflows Weighed on the Rupee
The continuous selling by FPIs last year had a major impact on the Indian currency. The rupee weakened by nearly 5 per cent against the US dollar in 2025. Volatile global markets and strong dollar trends made foreign investors more careful about putting money into emerging markets like India.
Experts See Hope for a Turnaround in 2026
Despite the weak start, market experts believe the situation may improve as 2026 progresses. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said foreign investors may slowly change their strategy this year. He explained that India’s strong economic growth and chances of recovery in corporate earnings could attract fresh foreign money in the coming months.
Supportive Global and Domestic Factors
Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, also shared an optimistic view. He said better India-US trade relations, a stable interest rate environment globally, and a steady rupee-dollar exchange rate could create a positive atmosphere for FPIs. He added that equity valuations are now more reasonable compared to last year, which may encourage foreign investors to return.
January Trend Remains Weak
However, experts noted that January is usually a weak month for FPI inflows. Over the past ten years, FPIs have pulled out money in eight Januarys. As a result, foreign flows are likely to stay sensitive to global news, economic data, and policy signals in the near term.
