Aberdeen Global Indian Equity Fund, the world's biggest India-only fund run by Aberdeen Asset Management PLC, accounted for around 405 of the outflows, or a net $328.8 million, according to the data this week.
The waning interest in these funds come even as overall foreign interest remains high, especially over the election of Narendra Modi as the Prime Minister last month. Data has consistently shown fund investors prefer diversified emerging market funds that minimise single-country risk.
Foreign investors invested a net of $8.8 billion in Indian shares so far this year, adding to their $20.1 billion in purchases last year.
"In the last six months sentiment has turned positive for India because of the elections and expectations of a better government," said Niranjan Risbood, director of Fund Research at Morningstar India said.
"But overall, India has faced a lot of macro problems and investors are still reluctant to put their money into India-specific funds, so most of the money coming into India is through diversified funds."
The net outflow in May compares with $123.51 million withdrawn from India-only funds in April and is
the highest since $814.04 million were redeemed in October 2008.
All but one of the top 10 India funds posted outflows last month. Combined assets under management of offshore India-only funds has shrunk from $55 billion in 2009 to $33.9 billion at the end of last year.
Aberdeen attributed the selling to some profit-taking after shares hit record highs and the end of the elections on May 16.
"We've seen some heavy selling towards the end of the month purely on valuations as the market hit all-time highs," James Thom an investment manager in Aberdeen's Asian equities team said.
"Investors are taking the opportunities to take some profit on the election event."