.Now more and more foreign investors are urging a review of the rule.

MUMBAI: In just four months this year, foreign portfolio investors (FPIs) have net sold stocks worth a little over $20.6 billion, surpassing the highest ever yearly net sales figure in the domestic market.In 2025, FPIs had net sold stocks worth $18.9 billion, the biggest annual outflow since foreign investors were allowed in 1992, data from Sebi and NSDL showed. In rupee terms, net selling so far in 2026 is at Rs 1.9 lakh crore while during the whole of 2025 it was at Rs 1.7 lakh crore. In the last two months alone, since the war in West Asia started, FPIs have taken out nearly Rs 1.8 lakh crore ($18.2 billion) from the stocks on a net basis. So far this year, only in Feb, FPIs were net buyers of Indian stocks, at Rs 22,615 crore ($2.5 billion), NSDL data showed.The war led to a sudden and sharp spike in the prices of crude oil, the biggest import item for India, which threatens to derail the country’s fiscal numbers and hurt the economy. This in turn weakened the rupee against most major currencies. This, combined with slower growth expectations of Indian companies and high valuations of stocks compared to India’s peers among emerging economies globally, led to sharp sell-off by foreign funds, market players said.Foreign funds have been almost consistent sellers of Indian equities since Oct 2024, taking out about $51.5 billion from Indian stocks. In the last 19 months to April 2026, they were net buyers in only six months.