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The effects of commotion, war-like situation and changing global order in many countries around the world are now visible on India’s stock market as well. The impact of the ongoing Russia-Ukraine war and the closure of the Strait of Hormuz due to Iran-America tension is clearly visible on India. Now the same effect is visible in the stock market and people are withdrawing their money in large numbers. In the month of April itself, foreign investors have withdrawn Rs 60,847 crore from the Indian stock market.

This shows that in view of the global situation, people are avoiding taking risks and do not want to leave their money in the market. According to data from National Securities Depository Limited (NSDL), with this withdrawal in the month of April, the total withdrawal of foreign portfolio investors (FPIs) in the first four months of 2026 has reached Rs 1.92 lakh crore. Last year i.e. in the whole of 2025, only Rs 1.66 lakh crore was withdrawn i.e. foreign investors had withdrawn only Rs 1.66 lakh crore from the Indian market in the whole year.

Bumper clearance in March-April

In the year 2026, FPIs were net sellers in all months except February. There was a withdrawal of Rs 35,962 crore in January while an investment of Rs 22,615 crore came in February, which was the highest monthly investment in 17 months. However, the trend suddenly changed in March and there was a record withdrawal of Rs 1.17 lakh crore which continued in April also with withdrawal of Rs 60,847 crore.

Market experts believe that the continued selling is a result of global economic pressures and increasing global risks. Himanshu Srivastava, Principal Manager (Research), Morningstar Investment Research India, said that in early April, rising tensions in West Asia led to a surge in crude oil prices, which again increased concerns about global inflation. This reduced expectations of an early cut in interest rates and global bond returns remained high, which impacted emerging markets including India.

Why are investors withdrawing money?

Walker Javed Khan, senior analyst (fundamental) at Angel One, termed the April withdrawal as a normal reaction to risk aversion due to US-Iran tensions. He said investor confidence has been affected due to crude oil prices rising above $100 per barrel, weakening of the rupee and concerns over inflation and current account deficit.

Walker Javed Khan said that if the ceasefire in Iran remains in place and WTI crude oil prices fall below $90 per barrel, foreign investment may stabilize again. However, he cautioned that conditions such as tensions in the Strait of Hormuz or US 10-year bond yields rising above 4.5 percent could trigger another selloff.