FPIs Sold ₹5,615 Crore of G-Secs in October — Third Straight Month

Foreign investors sold Indian government securities for a third straight month in October. The selling, however, slowed sharply — and the full-year picture is still one of net buying. That combination matters more than any single month's headline. Foreign portfolio investors (FPIs) sold a net ₹5,615 crore of Indian government securities under the fully accessible route (FAR) in October 2026, according to Clearing Corporation of India data reported by the Financial Express on 1 November. That compares with net sales of ₹10,602 crore in September. FPI holdings in government securities fell to ₹3.56 lakh crore as of 31 October, their lowest in five months. Yet FPIs remain net buyers of government securities in FY27 so far, with cumulative inflows of ₹43,075 crore, driven by heavy purchases in June and July.

Three months of selling sounds alarming until the scale is set against the stock. ₹5,615 crore is about 1.6% of the ₹3.56 lakh crore FPI holding in government securities. September's ₹10,602 crore was roughly double October's pace, so the direction of travel within the selling streak is actually improving. The five-month low in holdings is also a statement about the starting point: holdings were higher through the June–July buying spree, when tax concessions for overseas investors and the RBI's expansion of the FAR universe to longer-dated bonds pulled money in. October's selling trims that pile; it does not erase it. For scale, compare the bond flows with the equity flows reported for the same month: FPIs sold shares worth ₹38,513 crore in the secondary market in October, while putting ₹12,902 crore into primary-market issues — the highest primary inflow since July 2025, according to Business Standard's 30 October report drawing on NSDL and exchange data. Bonds are a small corner of the FPI story this year; equities are the main event.

Three forces show up in every account of the selling. First, US Treasury yields stayed high: the US 10-year yield hovered around 5.25% for much of October, close to a two-decade high, before easing to 4.93% on Friday. When dollar bonds pay that much, emerging-market debt looks less compelling. Second, the rupee stayed under pressure, which eats into a foreign investor's return when converted back to dollars. Third, elevated crude prices and geopolitical uncertainty kept risk appetite low. The RBI's October rate hike — repo up 25 basis points to 5.50% — also pushed domestic bond yields higher, handing existing holders mark-to-market losses even as it raised yields for new buyers. None of these is a verdict on India's bonds alone. They are global conditions that hit every emerging market's debt flows at once.

The most useful number in the report is not the ₹5,615 crore — it is the halving from September's ₹10,602 crore. Two things changed late in the month: the US 10-year yield eased from around 5.25% to 4.93%, and India's 10-year government bond yield closed at 7.41%. That leaves a yield gap of about 248 basis points between Indian and US 10-year bonds, wider than the 195 basis points at the start of October. A wider gap, once the rupee steadies, is exactly what eventually tempts foreign buyers back. Market participants quoted in the report expect selling to moderate further if the rupee stabilises, crude eases, global yields soften and the RBI's rate path becomes clearer.

Bond flows do not change what an SIP does. Your SIP buys units every month regardless of what foreign investors did last month, and the October data says nothing about any individual fund. What the data does explain is background noise you may have noticed: bond-heavy and hybrid funds faced a choppy month as yields rose, and equity markets stayed under foreign-selling pressure even as domestic investors kept buying. If your SIP is in a diversified equity fund, the FPI selling is one more reason the market felt heavy in October — not a reason, on its own, to stop or restart a plan.

Use the calculator above to test what your own SIP could look like at different monthly amounts and time periods, rather than reacting to one month of foreign flows.

Four markers decide whether November breaks the selling streak. The rupee's direction — a steadier rupee removes the biggest drag on foreign returns. US Treasury yields — another leg down from 4.93% would help. Crude prices — elevated oil keeps pressure on. And the RBI's next policy meeting, on 2–4 December, which will clarify whether the October hike was a one-off or the start of a tightening phase. November's FPI data, due in early December, will show whether October's slowdown was a turn or just a pause. Educational content only — not financial advice. Consult a SEBI-registered investment adviser for personal guidance; investments are subject to market risk. Sources: Financial Express, 1 November 2026: "FPIs pull out of G-Secs for third straight month" — October net sales ₹5,615 crore (FAR), September ₹10,602 crore, holdings ₹3.56 lakh crore at 31 October (five-month low), FY27 cumulative inflows ₹43,075 crore, US 10-year around 5.25% easing to 4.93%, India 10-year 7.41%, yield gap 248 bps vs 195 bps at month start; figures attributed to Clearing Corporation of India data. Business Standard, 30 October 2026: FPIs sold ₹38,513 crore in secondary equities in October, primary-market investments ₹12,902 crore (highest since July 2025), NSDL and exchange data. RBI repo rate 5.50% after the October 25 bps hike; next MPC meeting 2–4 December 2026.