The $6.4 billion iShares MSCI India ETF experienced withdrawals exceeding $220 million on Monday, marking its biggest single-day outflow since April 2025. Those redemptions continue a run of investor exits that has lasted five weeks and now surpasses $2 billion in cumulative outflows, according to data compiled by Bloomberg.
Market participants attribute the recent selloff in Indian assets primarily to concerns surrounding the country’s heavy reliance on fuel transiting the Strait of Hormuz. India imports roughly 90% of its crude oil and nearly 50% of its liquefied petroleum gas (LPG). Roughly half of that crude oil and more than three-quarters of the LPG consignments travel through the Strait of Hormuz, a waterway that Iran has effectively put out of commission.
The interruption to these shipping lanes has coincided with sharp moves in Indian markets. The NSE Nifty 50 Index dropped by over 11% in March, bringing the benchmark back toward levels that were observed amid market turbulence after the rollout of US tariffs a year earlier. Currency markets have also reflected the pressure: the Indian rupee depreciated by more than 4% against the US dollar over the same period.
ETF investors have been a visible part of the adjustment. The iShares MSCI India ETF’s $220 million-plus single-day withdrawal represents the largest recorded since April 2025 and adds to an already significant five-week withdrawal trend totaling in excess of $2 billion. These flows underscore how geopolitical disruptions to energy transit routes can feed through to capital allocation decisions, equity benchmarks and currency valuations.
While the data point on Monday was the most acute single-day move, the broader pattern of exits across the month points to sustained investor concern tied to energy security and its implications for India’s import-dependent fuel needs. The concentration of crude and LPG shipments through the Strait of Hormuz, and the reported closure of that route, remain the focal issues cited by market observers for the wave of selling.
At this stage the available information documents a clear link between the shipping disruption and market responses in both equities and currency, without providing additional detail on prospective policy moves or alternate supply routes.