New Delhi, Aug. 2 -- The exodus seems incessant-in the first six months of 2026, foreign portfolio investors (FPIs) have pulled out $28 billion from Indian equities, exceeding the $19 billion they pulled out in all of 2025.

This has been a primary reason for the rupee's sharp decline, as India saw a rare instance of its capital account going into deficit during the first quarter of 2026-27.

Curiously, though, despite the heavy selling and large supply of new shares via public offerings, stock prices, at least at headline index levels, haven't corrected sharply. The Nifty 50 index is down barely 8% from its all-time high.

The reason is simple. Domestic flows into equity through mutual funds, National Pension System and the Employees' Pr...