India the new 'no-go' zone for FIIs? 7 brutal truths behind $18 billion exodus

Institutional investors are hesitant to buy into the Indian market despite valuations returning to fair levels. Concerns include a lack of progress in the Iran-US conflict, rising oil prices that widen the current account deficit and stoke inflation, a shift in risk premiums favoring other emerging markets, India's evolving tax regime, and a history of zero returns for investors holding Indian stocks. This has led to a significant outflow from foreign institutional investors (FIIs) as they seek better returns elsewhere.