FPI net outflows hit 34-year peak in FY26

For foreign investors backing Indian equities, the financial year 2026 was onethey wouldrather forget.

- Abhinaba Saha

It was a period dotted with global disruptions, starting with US-led tariffuncertaintiesand endingamid the US-Israel-Lran war. Each externalshock raised risks to India Inc.’s headline carningsand triggered asharp exodus of overseas capital throughout FY26, making market flowsmorevolatileand retums lesspredictable.

Foreign portfolio investors (FP) tured the most bearish on India in 34 years, with net outflows surging 42% year-on-year to nearly 21.8 trillion in FY26—the highest since 1992, when data first became available, according to Mint'sanalysis of National Securities DepositoryLtd data. The rout intensified in March 2026 alone, which sawasharp 2.18trillion selloff, as the West Asia war unsettled India’s macroeconomic outlook and raised the risk of earnings downgrades for FY27.

Afterthe December-quarter carnings, the Street was pencilling in around 16% carnings growth forthe Nifty 50. But the recent surge in crude prices amid the war and its potential spilloverinto slower economic growth have forced a reset, with estimates now being sharply cut. Goldman Sachshas lowered its forecast to 8%.