Spooked by a possible derailment of key economic reforms, foreign investors have pulled out over Rs 800 crore from the Indian capital market in the last fortnight.
Foreign portfolio investors (FPIs) may further suck out money due to weakness in the rupee, triggered by a devaluation of the Chinese yuan, analysts said.
However, experts are sanguine about FPI inflows in the Indian market in the long term.
The net outflow by FPIs in equities stood at Rs 684 crore till August 13 while the same read Rs 143 crore for the debt market during the period, which works out to a net outflow of Rs 827 crore, according to depository data.
Prior to that, FPIs pumped a net Rs 5,323 crore into equities and debt last month.
Investors are worried that a key reforms Bill on goods and services tax (GST) might get delayed as the government failed to pass it during the monsoon session of Parliament.
Since January 2015, overseas investors have invested a net amount of Rs 43,715 crore in equities and Rs 39,207 crore in the debt market.