Oil shock triggers massive FPI exodus from Indian markets. Foreign portfolio investors have pulled out Rs 1.68 trillion in 2026, with March alone accounting for Rs 1.1 trillion in selloffs as West Asia conflict drove oil prices up 22 percent to around $90 per barrel. The geopolitical tension disrupted energy supplies through the Strait of Hormuz, creating significant macroeconomic headwinds for India. Rising crude prices widen fiscal deficits, stoke inflation, and dampen growth prospects given India's heavy energy import dependence. Indian equities and the rupee weakened considerably, eroding overseas investor returns and amplifying risk-off sentiment among global funds. Market experts note that elevated valuations combined with deteriorating earnings outlooks have made India less attractive to foreign investors.
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