New Delhi: India recorded a sharp rise in outbound investment in March even as foreign portfolio investors continued to withdraw funds and crude import costs increased due to the disruptions caused by the West Asia conflict. The numbers indicate Indian companies are expanding overseas and deploying their capital abroad, while foreign investors are pulling money out of Indian markets.The Business Standard reported that foreign portfolio investors (FPI) marked record cumulative outflows of about Rs 1.68 trillion in 2026 so far. March accounted for the bulk of the selling, with equities worth Rs 1.1 trillion sold during the month. Net equity investment by FPIs stood at negative Rs 1,67,974 crore as of mid April, according to NSDL data cited in the report.The negative figure implies that FPIs are selling their existing holdings in India and not just what they bought this year.The outflows have coincided with rising crude oil prices due to the conflicts between the US-Israel and Iran, which spilled over into Lebanon and beyond. Brent crude has risen more than 22% since the start of hostilities on February 28, trading near USD 90 per barrel and the higher oil prices threaten to add inflationary pressures and widen India’s fiscal deficit.At the same time, according to Business Standard, outbound foreign direct investment (FDI) rose 27.5% year on year to USD 7.06 billion in March. FDI from India stood at USD 5.54 billion a year earlier. The immediate inference would be that Indian companies were investing more overseas in March this year than they did in March the previous year.Not just that, India’s outbound FDI was USD 2.96 billion in February this year, which means that it marked an over 138% month-on-month increase, Business Standard reported, based on Reserve Bank of India data. This would indicate that the war in West Asia, or other factors, did not seem to dampen Indian corporates’ international plans.For the financial year 2025-26 as a whole, outbound FDI reached USD 48.6 billion compared with USD 43.7 billion in the previous year. Outbound investments are measured as financial commitments, and include equity, loans and guarantees.The report noted that while loans declined to USD 691.95 million in March from USD 1.52 billion a year earlier, guarantees increased to USD 4.91 billion from USD 1.45 billion. (Guarantees may not involve immediate transfer of funds, unlike loans.) Major commitments included the USD 2.26 billion in guarantees by Tata Motors for its Singapore-based subsidiary and USD 660 million by Renew Treasury IFSC. Reliance Industries, Jindal Power, Rolta India and others also reported commitments.At the same time, Indian companies filed proposals worth USD 4.59 billion in February through external commercial borrowings and foreign currency convertible bonds, down from USD 5.33 billion in January, a possible indication of less hospitable climate to raise funds, though the highest amount in this financial year was recorded in January.Of the total, USD 4.19 billion was through the automatic route and USD 400 million via the approval route. Companies such as Tata Power Renewable Energy, Renew Vyonan Power and Manappuram Finance were among those seeking funds.In a parallel development, the Financial Express reported that India’s crude basket rose sharply due to higher freight and insurance costs. The conflicts are currently mired in lack of clarity on whether ceasefires will continue beyond Tuesday (April 21), creating a situation where the average price of crude has risen from USD 69 per barrel in February this year to USD 113 in March.By April 20, the cost of India’s crude basked crossed USD 118 per barrel. Since freight costs have kept pace with the uncertainty, by rising from USD 4.60 per barrel to nearly USD 15 per barrel and war risk insurance premiums have risen to as much as 3% of vessel value, there are likely growing pressures on fuel prices in India and/or a widening of the fiscal deficit.Apart from these disruptions in pricing trends, there have been supply disruptions due to an almost 60% decline in crude flows to India from the Strait of Hormuz, the same Financial Express report said. From about 3.06 million barrels per day in February, the flow fell to 1.22 million barrels in March.Shipping availability has also tightened as vessels rerouted via longer routes such as the Cape of Good Hope have increased delivery times as well as costs, while alternate West Asian pipelines are unable to make up for the disruptions along Hormuz, the reports added.