Foreign Portfolio Investors (FPIs) have continued their selling streak in the Indian stock market, withdrawing approximately ₹11,789 crore in January 2026 up to around January 9th. This significant outflow follows a record net outflow of ₹1.66 lakh crore by FPIs from Indian equities in 2025, indicating a sustained cautious sentiment among foreign investors. The primary factors driving these FPI outflows are a combination of global and macro-level headwinds. Geopolitical uncertainties play a crucial role, including threats from US President Donald Trump of fresh tariffs on India for its continued purchase of Russian oil. A bipartisan US bill proposing tariffs of up to 500% on countries buying Russian oil, backed by Trump, has added to investor apprehension. Furthermore, US military action against Venezuela has heightened global risk aversion, making emerging market equities, including India's, less attractive for FPIs. Currency volatility is another significant driver, with a resurgent US Dollar and the Indian Rupee depreciating nearly 5% in 2025. This continued weakness erodes dollar-denominated returns for foreign investors, prompting them to hedge their positions by exiting emerging markets. High valuations of Indian equities compared to other emerging markets are also cited as a concern for FPIs. Despite these global challenges, the domestic macro environment in India remains positive, with analysts projecting strong corporate earnings growth of around 16% year-on-year in Q3FY26. Experts suggest that a structural reversal in FPI flows will likely depend on factors such as currency stability, clarity on the US Federal Reserve's rate path, and the outcome of India's Union Budget 2026. Positive developments in India-US trade talks regarding tariff exemptions could also attract FPI inflows back into specific sectors.