Foreign portfolio investors (FPIs) became aggressive sellers of Indian equities in March, pulling out Rs 52,704 crore (about US$5.73 billion) from the cash market in the first fortnight of the month. The withdrawal comes amid rising tensions in West Asia, rupee weakness and growing concerns over the impact of higher crude oil prices on India’s economic growth and corporate earnings.According to depository data, FPIs have been net sellers on every trading day so far in March. Between the beginning of the month and March 13, foreign investors sold equities worth about Rs 52,704 crore.The latest round of sales followed a brief revival in foreign inflows in February, when FPIs invested Rs 22,615 crore in Indian equities. This is the highest monthly flow recorded in the last 17 months.Before the February inflow, foreign investors were continuously withdrawing money from the market. They withdrew Rs 35,962 crore in January, Rs 22,611 crore in December and Rs 3,765 crore in November.Analysts say the renewed selling pressure is largely linked to geopolitical uncertainty in West Asia and its impact on energy markets.Wakarjaved Khan, senior fundamental analyst at Angel One, said tensions in the region and concerns about a prolonged conflict affecting the Strait of Hormuz pushed Brent crude prices above $100 a barrel, prompting investors to take a risk-off approach. He said sustained rupee weakness near Rs 92 level, rise in US bond yields and profit-booking after earlier inflows had added to the pressure.Similar concerns were also highlighted by VK Vijayakumar, chief investment strategist at Geojit Investments. He said conflicts in West Asia have weakened global equity markets, while the falling rupee and rising crude oil prices have raised concerns about their potential impact on India’s economic growth and corporate profitability.Vijayakumar also said that India has given comparatively weak returns compared to many developed and emerging markets in the last 18 months, which has reduced the interest of foreign investors in the market.He pointed out that markets such as South Korea, Taiwan and China are currently seen as more attractive destinations for investors. According to him, even after the recent recovery, these markets remain relatively cheap compared to India and offer better corporate earnings prospects. As a result, FPI selling in India may continue in the near future.Despite heavy outflows, analysts believe the selloff has opened up opportunities for domestic investors. Strong FPI outflows from financial stocks have made valuations more attractive for local buyers.Looking ahead, Khan said the outlook for the second half of March would remain cautious. If geopolitical tensions ease or if fourth-quarter earnings from sectors such as banking and consumption come in higher than expected, outflows could slow. However, further increases in oil prices or fresh global uncertainties could accelerate the selling trend.Sector-wise, information technology stocks are set to experience the largest ever foreign outflows in 2025. FPIs have pulled out around Rs 74,700 crore from the IT sector amid weak revenue growth, tariff uncertainties and weak global spending on technology.According to Aditya Shankar, co-founder, Centricity WealthTech, fast-moving consumer goods (FMCG) stocks have also faced significant selling, with around Rs 36,800 crore being drained as urban consumption slowed and companies faced margin pressure.The power and healthcare sectors have also seen significant exits, with FPIs pulling out over Rs 24,000-26,000 crore, mainly due to rising valuations relative to earnings distribution.At the same time, FPI has increased its investment in telecom, oil and gas, metals and chemicals. Shankar said this indicates a trend towards domestic value segments and commodity-linked sectors by foreign investors.