Analysis · Financial Services

Foreign investor interest in India has died out

By Startup Enthusiast · 13 April 2026

What they do

Zerodha is a discount stockbroking platform for Indian retail investors

Nithin Kamath said foreign investor interest in India has 'pretty much died out' amid heavy outflows

India became the fourth-largest underweight position in emerging market portfolios. sector

Nithin Kamath, cofounder of Zerodha, said foreign investor interest in India has 'pretty much died out'.
Foreign investors saw no returns in Indian stocks for four and a half years, per DSP Mutual Fund's Netra report.
India's weighting in the MSCI Emerging Markets Index slipped from second to fourth, behind China, Taiwan, and South Korea.
On a year-to-date basis, FIIs sold shares worth ₹1,79,335 crore.
FPIs pulled out nearly $28 billion from Indian equities between September 2024 and November 2025.
Foreign ownership in Indian equities fell to a 14-year low.
India became the second-largest underweight position in emerging market portfolios, per Tanvi Kanchan of Anand Rathi.
India's weighting in the MSCI Emerging Markets Index slipped from second to fourth, behind China, Taiwan, and South Korea.

India's weighting in the MSCI Emerging Markets Index has slipped from second to fourth, now behind China, Taiwan, and South Korea.
Structural factors include a reassessment of India's valuation premium and earnings delivery pace.
Tarun Singh of Highbrow Securities said FIIs now see India as expensive compared to Japan, Taiwan, and Korea.
Tanvi Kanchan said the structural concern is that India is expensive and hasn't delivered earnings growth to justify the premium.
A decline in crude prices below $85 per barrel would ease inflation, current account deficit, and currency stability pressures.

Zerodha is a discount stockbroking platform that offers low-cost trading in Indian equities and derivatives.
It generates revenue primarily through brokerage fees on trades, not advisory or research charges.
The platform serves retail investors across India, with a focus on cost-effective trading.
Zerodha also provides investment tools and educational resources through its platform.
It operates online, with no physical branches, keeping overheads low.
The company has a large user base of active traders who benefit from flat fees per trade.
Zerodha's model contrasts with traditional full-service brokers that charge higher percentages.

Strong Q4 FY26 earnings, especially from banking, capital goods, and domestic consumption, could rebuild foreign investor confidence.
Currency stability, earnings, and oil prices are key triggers for foreign capital return.
Tarun Singh said simplifying taxes is the quickest way to bring money back and would send a strong positive signal.