Foreign Investors Exit Indian Market: Why Rupee is Falling Amidst High Valuations

• Foreign Portfolio Investors (FPIs) are continuously selling in the Indian stock market, leading to volatility.
• High market valuations are a primary reason, as investors feel future returns are limited and risks are high.
• Uncertainty in India-US relations, including tariffs and geopolitical shifts, makes investors cautious.
• Changing global trade environment and protectionism are forcing Indian companies to invest abroad, impacting domestic capital flow.
• The rupee is weakening due to increased dollar demand, as foreign investment isn't sufficient to cover India's trade deficit.

Why It Matters: FPIs are withdrawing from India due to high valuations, geopolitical uncertainty, and global trade shifts, weakening the rupee.