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Amidst unit connected the rupee and India’s overseas speech reserves, the latest information from the Reserve Bank of India (RBI) shows that the full magnitude of wealth that near the state successful March 2026 exceeded inflows by $11.7 billion. This was the archetypal period aft the commencement of the West Asia crisis.
The wide outflow was driven by the exodus of overseas portfolio investors, which overshadowed the information that nett overseas nonstop concern (FDI) was affirmative for the 2nd consecutive month.
That is, portion nett FDI was $1.6 cardinal successful March 2026, nett overseas portfolio inflows stood astatine -$13.3 billion. Typically, nonstop concern involves wealth flowing into growth-generating assets, portion portfolio concern refers to wealth flowing into short- to medium-term banal holdings.
According to the RBI, the outflow of portfolio investments continued successful April and May.
The outflow of dollars from the state has simultaneously eaten into the RBI’s overseas speech reserves and has led to the depreciation of the rupee.
Positive nonstop flows
Over the afloat fiscal twelvemonth 2025-26, nett FDI stood astatine $7.6 billion, astir 700% higher than successful 2024-25. This occurred contempt six retired of the 12 months experiencing much nonstop concern flowing retired than in.
“During 2025-26, some gross and nett FDI inflows were higher than the erstwhile year,” the RBI said successful its monthly bulletin for April 2026. “In March, nett FDI remained affirmative for the 2nd consecutive month, contempt a deceleration successful gross FDI, connected relationship of comparatively debased repatriation and outward FDI.”
Gross FDI successful March 2026, oregon the full magnitude of nonstop concern entering the state that month, stood astatine $6.2 billion, astir 31% little than successful February. However, this fig was 6% higher than successful March of past year.
On the different hand, full outflows inched up to $4.7 cardinal successful March 2026 from $4.5 cardinal successful the erstwhile month. This fig was 27% little than successful March 2025.
Within the outflows, some repatriation by overseas companies operating successful India and outward nonstop concern by Indian companies decreased arsenic compared to the erstwhile year.
That is, the quantum of wealth repatriated and disinvested successful March 2026 stood astatine $2.3 billion, down 40% implicit March past year, portion outward FDI by Indian companies stood astatine $4.7 billion, down by 27%.
Portfolio investors leave
The data, however, showed that portion nett FDI was affirmative successful March 2026, nett overseas portfolio investments were importantly negative. That is, overseas portfolio investors (FPIs) took retired $13.3 cardinal much from the Indian markets than they invested.
This situation, the RBI said, continued into April and besides successful May.
“In April and May truthful acold (up to the 20th), FPIs remained nett sellers, peculiarly successful the equity segment, amidst persistent geopolitical uncertainty and continued tensions successful West Asia,” the RBI said.
