Net inflows into debt mutual fund schemes plunged by 83% in FY26, falling from Rs 1.38 lakh crore in FY25 to Rs 22,262 crore. The sharp decline was largely driven by hardening yields amid heightened macroeconomic uncertainty, which dampened investor interest. Rahul Singh, head – fixed income, LIC Mutual Fund, said that the end of the interest rate cycle reduced the appeal of duration strategies. Additionally, US tariffs and broader global pressures weighed on the rupee and weakened foreign investor sentiment.