In 2026, Foreign Institutional Investors (FIIs) withdrew a historic ₹2.2 lakh crore from Indian equities, driven by global crises, including the conflict in West Asia. Debopam Chaudhuri, Chief Economist at Piramal Group, described this trend as a 'temporary fear psychosis' typical of emerging markets during such turmoil. He remains optimistic about India's long-term economic prospects, anticipating growth exceeding 6.5%. Chaudhuri highlighted the significance of the Reserve Bank of India's (RBI) record dividend of ₹2.87 trillion, which will assist in managing expected fiscal deficits. The rupee's depreciation against the US dollar is attributed to external shocks, with Chaudhuri suggesting it is currently undervalued. Radhika Rao, Senior Economist at DBS Bank, emphasized that geopolitical uncertainties are affecting India's bond yields and overall fiscal expectations. Despite recent corrections in equity markets, Rao noted that elevated valuations remain challenging in the current environment, but she expects the markets to stabilize as external shocks diminish.