Expert View: Developed Markets Now Offer Higher Growth and Higher ROE, Says Waterfield Advisors MD, as FPI Outflows From India Persist

Persistent FPI outflows from India matter for the rupee, for index heavyweights and for sentiment. The rupee was around 94.8 to 94.9 per dollar on 21 Oct, and Brent crude was near $110 a barrel.

This guide covers the flow data, the reasons cited, what higher ROE means, where foreign money is moving, how domestic buyers have helped and what to watch. It is educational and not a recommendation to buy or sell any share.

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FPI Outflows From India: The Numbers

Period	Net foreign portfolio flow
July 2026	Net buying of Rs 20,200 crore
August 2026	Net buying of Rs 29,631 crore
September 2026	Net selling of Rs 35,861 crore
October 2026 (to about 18 Oct)	Net selling of Rs 52,100 crore
2026 year to date	Net selling of Rs 3.12 lakh crore
2025 full year	Net selling of Rs 1.66 lakh crore

The figures come from CDSL data as reported on 18 Oct. Adding July to October gives net selling of about Rs 38,000 crore over the four months (my calculation), so the recent FPI outflows from India have more than erased the summer buying. Foreign investors turned net buyers on 16 Oct, ending a streak of 15 sessions of selling, but the data were provisional and one day of buying does not end the FPI outflows from India.

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Why FPI Outflows From India Are Rising: The Reasons Cited

Reason	Detail
Crude oil	Brent was near $110 a barrel on 21 Oct, close to a five-month high
US yields and dollar	Elevated US bond yields and a stronger dollar reduce appetite for emerging markets
US inflation	Persistent inflation has raised expectations of another US Federal Reserve rate hike
North Asian rally	An AI-led rally in North Asian markets draws money away from India
Sector rotation	Selling in financial services and oil-related stocks; buying in consumer services, digital platforms, entertainment, restaurants and healthcare services

The same factors behind the FPI outflows from India show up in the overnight moves. South Korea's Kospi fell 3.73% and Japan's Nikkei 225 fell 1.30% on the latest session, according to one pre-market report, which shows that the North Asian rally is also volatile.

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What Waterfield Advisors' Riddhiman Jain Says

Point	Summary of the interview as published
Growth and returns	Developed markets currently offer stronger growth and returns
Effect on India	That is drawing foreign investment away from India
Oil and inflation	The inflation impact of oil is likely to be clearer in the coming quarters
Market outlook	He expects volatile and uneven markets
Approach	He favours nimble stock-picking

These points are from the standfirst of the interview and the headline, and I did not have access to the full text, so I cannot report his figures, sector calls or time frames. Jain is Managing Director and Head of Investment Strategy and Solutions at Waterfield Advisors, according to the firm's announcement. He links FPI outflows from India to the pull of developed markets.

What Higher ROE Means for FPI Outflows From India

Return on equity, or ROE, is net profit divided by shareholders' equity, and it measures how much profit a company earns on the money its owners have invested. When a developed market offers both higher growth and higher ROE, foreign funds have a reason to shift allocation, which is how developed-market returns can feed FPI outflows from India. The headline does not give the ROE numbers, and I did not find an independent comparison, so I cannot confirm the gap.

Risk: A comparison of ROE across markets depends on the sector mix and the period, and a single quarter of flows does not prove a long-term shift in allocation.

Domestic Buyers Against FPI Outflows From India

Item	Latest figure
Domestic institutional net buying in 2026 against FPI outflows from India	More than Rs 5 lakh crore, the third year in a row above that level
Nifty 50 at 10:07 AM IST on 21 Oct	About 22,988, up about 0.4% from 22,888.95
Sensex at 10:07 AM IST on 21 Oct	About 74,241, up about 0.5% from 73,852.90
Nifty range, 13 Oct to 21 Oct	About 22,288 to 23,175
Rupee	About 94.8 to 94.9 per dollar

Steady domestic buying has limited the damage from FPI outflows from India, and the Nifty has moved within a range of roughly 900 points over the last six sessions (my calculation). That supports the view of Jain that markets will be uneven and that picking individual stocks may matter more than owning the broad market.

What to Watch Next on FPI Outflows From India

1. Daily provisional data on FPI outflows from India after the 16 Oct return to net buying, to see if it lasts
2. Brent crude near $110 and any further rise in US bond yields or the dollar
3. The Federal Reserve rate path and US inflation data
4. Whether the North Asian rally cools, since it competes for the same foreign money
5. Domestic institutional buying and the Nifty support near 22,800 and resistance near 23,000 to 23,200

Conclusion

FPI outflows from India have reached Rs 3.12 lakh crore in 2026, and Waterfield Advisors' Riddhiman Jain says developed markets offer higher growth and ROE, which keeps foreign money cautious. Domestic buyers have cushioned the market, but the next few quarters of oil and inflation data may decide whether flows return. Check flow data and valuations before acting on any single view.

Frequently Asked Questions

How much have FPI outflows from India been in 2026?

Ans. Foreign portfolio investors have sold Rs 3.12 lakh crore of Indian equities in 2026 so far, nearly double the Rs 1.66 lakh crore sold in 2025. In October alone they sold Rs 52,100 crore up to about 18 Oct.

Did FPI outflows from India stop in October?

Ans. Provisional data show foreign investors turned net buyers on 16 Oct, ending a 15-session selling streak. One day of buying does not confirm a change in trend, so watch the daily data.

What did Waterfield Advisors' MD say about developed markets and FPI outflows from India?

Ans. Riddhiman Jain says developed markets currently offer stronger growth and higher ROE, which is drawing foreign investment away from India. He expects uneven, volatile markets and favours nimble stock-picking.

Why are FPI outflows from India happening?

Ans. Reasons cited include higher crude oil, elevated US yields, a stronger dollar, persistent US inflation that raises expectations of a Fed rate hike, and an AI-led rally in North Asian markets. FPIs also rotated out of financials and oil-related stocks.

What does higher ROE mean for FPI outflows from India?

Ans. ROE is the profit a company earns on shareholders' equity, so a higher ROE means more profit for each rupee of capital. Foreign funds compare ROE and growth across markets when they allocate money.

Who has been buying while FPI outflows from India continue?

Ans. Domestic institutions have bought more than Rs 5 lakh crore in 2026, the third straight calendar year above that level. Their buying has cushioned the fall in the market.

What should investors watch next on FPI outflows from India?

Ans. Watch daily FPI flows, Brent crude near $110, US yields, the Fed path and the rupee near 94.8 to 94.9. Also check whether the Nifty holds support near 22,800.

Is this article investment advice?

Ans. No. It is educational and not a recommendation to buy or sell. Please check the figures against company filings and your own risk profile before you act on anything you read here.