Archive · 28 Sep 2026
Experts Say AI Gap Is Not Driving India’s FPI Outflows
Experts discussed why foreign investors have been taking money out of India.
They said the main reason was not that India lacks a large artificial-intelligence industry.
Many other emerging Asian markets also lost foreign investment in 2026.
The cited figures showed $190 billion leaving emerging Asia and $25 billion leaving India.
Samir Arora said investors were changing which Indian stocks they owned instead of abandoning India completely.
He said strong US markets, interest rates, geopolitical problems and tariffs mattered more.
Shankar Sharma said countries without major AI industries, such as Poland and Greece, had also performed well.
He added that India could still benefit from AI through power, cables, cooling, data centres and other infrastructure.
Experts said India’s lack of a major AI sector was not causing foreign portfolio investors to withdraw.
Goldman Sachs data cited $190 billion in 2026 outflows from emerging Asia, including $25 billion from India.
Samir Arora said FPIs were changing their Indian portfolios rather than simply leaving the market.
Foreign holdings in 10 major Indian stocks fell from 40.9% in March 2022 to 21.3% in March 2026.
Speakers cited US market strength, interest rates, geopolitical risks and tariffs as larger outflow drivers, while noting AI-linked infrastructure opportunities in India.
- Who
- Capital-market experts Samir Arora and Shankar Sharma discussed the outflows at the summit, alongside ICBI founders Aditya Murarka, Vishnu Sureka and Mahesh Kedia.
- What
- The experts argued that India’s lack of a major AI investment opportunity was not the main cause of FPI outflows.
- When
- The discussion took place on Saturday; the cited outflow data covered 2026, while portfolio comparisons ran through March 2026.
- Where
- At the ICBI Wealth Summit, organised by ICBI in association with The Telegraph.
- Why
- The speakers attributed the outflows more to broader emerging-market trends, stronger US markets, interest rates, geopolitical uncertainty and tariff wars.
Broader-Market Explanation
AI-Gap Explanation
Main cause of outflows
Broader-Market Explanation
Samir Arora and Shankar Sharma said broader emerging-market outflows, stronger US markets, interest rates, geopolitical uncertainty and tariffs were more important drivers.
AI-Gap Explanation
The alternative explanation was that investors were leaving India because it lacked a major AI-driven opportunity and were moving toward AI-linked markets; the speakers disputed this view.
Whether investors are abandoning India
Broader-Market Explanation
Arora said FPIs were reshaping their Indian portfolios, reducing exposure to some large-cap stocks while increasing exposure to others.
AI-Gap Explanation
The AI-gap view suggests India may appear less attractive than markets with stronger direct participation in the AI boom, though the speakers said this was an overly convenient explanation.
India’s AI-related opportunity
Broader-Market Explanation
Sharma said India could benefit from AI-related spending through data centres and infrastructure such as power, transmission, cables, cooling and EPC.
AI-Gap Explanation
Because India lacks a major AI presence, it may have less direct exposure to the AI-led investment boom than AI-focused markets.
- Emerging Asia outflows
- $190 billion in cumulative FPI outflows in 2026, according to Goldman Sachs data cited at the summit.
- India outflows
- India recorded $25 billion in FPI outflows.
- Other reported outflows
- Korea accounted for $120 billion and Taiwan for $43 billion of the cited outflows.
- Top-stock concentration in 2022
- Ten stocks accounted for about 40.9% of FPI holdings in March 2022.
- Top-stock concentration in 2026
- The same group accounted for 21.3% of FPI holdings by March 2026.
- Stocks gaining exposure
- FPIs increased exposure to Eternal, HDFC AMC and Polycab India over the period cited.
- AI-linked infrastructure
- Shankar Sharma identified power generation, transmission, switchgear, cables, optical cables, cooling and some EPC as potential beneficiaries.
