Foreign investors pull a record $12 billion from Indian stocks, sparked by Iran war
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Foreign investors are pulling out a record $12 billion from Indian equities as the Iran conflict drives up energy costs and raises doubts on economic growth.
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In this article .NSEI INR= HSBC Follow your favorite stocks CREATE FREE ACCOUNT People stand in a queue to refill fuel at a gas station in Guwahati, India, on March 26, 2026. David Talukdar | Anadolu | Getty Images Foreign investors are on track to pull a record $12 billion from Indian equities this March as the Iran war disrupts oil and gas supplies, squeezing the economy and stoking fears of a growth slowdown. With just two trading days left in the month, foreign portfolio investors have already pulled out 1.12 trillion rupees ($12.1 billion) — likely marking the worst monthly selloff, surpassing the previous record of 940 billion rupees in October 2024, according to data from depository firm NSDL. "Large FII outflows in March 2026 are linked to the conflict in the Middle East," said Peeyush Mittal, portfolio manager at Matthews Asia — FII refers to foreign institutional investors. "The longer the conflict persists, the deeper the negative impact on India's economic growth," he added in an email to CNBC. Growth worries HSBC 's flash Purchasing Managers' Index released Tuesday showed India's private‑sector activity in March slowing to its weakest level since October 2022 , as softer domestic demand outweighed the strongest rise in international orders. Companies surveyed cited the Middle East conflict, unstable market conditions, and intensifying inflationary pressures as factors weighing on growth. Cost inflation is now near a four‑year high. As the world's third‑largest oil importer and second‑largest liquefied petroleum gas consumer, India is grappling with rising energy costs and panic‑buying amid tightening supplies due to the closure of the Strait of Hormuz . If oil settles at $85-$95 a barrel after the war, that could lead to incremental outflows of $40 billion to $50 billion — more than 1% of India's GDP — according to Renaissance Investment Managers CEO and Chief Investment Officer Pankaj Murarka, speaking to CNBC's " Inside India " on Friday. This could t...
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