New Delhi: The cumulative outflow of Foreign portfolio investors (FPIs) so far this year has already exceeded those of any full year previously, with the net selloff by FPIs so far this year amounting to around Rs 1.68 trillion, reported Business Standard.Owing to the war in West Asia, the biggest exodus of FPIs was witnessed in March wherein FPIs sold Indian equities worth Rs 1.1 trillion during the month.The increase in oil prices, because of the closure of the Strait of Hormuz widened the fiscal deficit, increased inflation and impacted growth because of India’s heavy reliance on energy imports.The impact of the West Asia crisis has also been felt by the Indian markets, with the Sensex declining 7.9% so far this year and the Nifty 6.8%, reported Business Standard.Similarly, the market capitalisation of Bombay Stock Exchange (BSE)-listed firms has fallen by 10.1 trillion to 465.7 trillion.The rupee too has weakened by 3.5% in 2026, including a 2.3% drop since the conflict began, to 93.1 per dollar, eroding returns for overseas investors.“We have seen significant rupee depreciation. While valuations can adjust, as seen last month, the currency’s depreciation has wiped out returns for FPIs. “If the war ends and oil falls below $80, we could see a rebound in the currency and a reversal in flows,” Pramod Gubbi, co-founder of Marcellus Investment Managers, adding structural stability in the rupee is critical told Business Standard.