New Delhi, March 30 -- India has been in a sustained FII risk-off phase since late 2024, which intensified in March amid rising geopolitical tensions and oil-price volatility. Sentiment softened as the expected duration of the conflict became less clear, raising concerns about domestic growth and potential earnings downgrades as crude moved above $100. FII outflows, profit booking by retail investors, and a moderation in DII buying together amplified the decline in equity markets. FIIs have sold about $16.5 bn over the past 12 months in India, of which $11.5 bn is in this month, among the highest across emerging markets.

A key driver of the selling has been India's premium valuation. As a result, market valuations have corrected toward t...