An offshore India fund is one that is not domiciled in India but invests primarily in Indian markets.
"India-focused offshore funds and ETFs registered a net outflow of USD 0.9 billion for the first quarter. This consists of USD 878 million of outflows from offshore funds and USD 30 million of outflows from offshore ETFs," the report by mutual fund tracker Morningstar said.
The outflows were seen in January and February, while there was inflows in March.
During the January-March period of 2014, overseas investors infused a net amount of USD 3.65 billion into the country's stock market.
Assets of all India-focused offshore funds and ETFs increased by six per cent during the first quarter to about USD 31.4 billion at the end of March 2014. The total assets of these funds and ETFs are now down by a massive 44 per cent from the peak of USD 55.7 billion in 2010.
India-focused offshore equity funds and ETFs delivered an average return of 8.75 per cent (in USD terms) during the quarter, outperforming the MSCI India Index by 0.6 per cent.
Also, the country's equity markets managed to close on a high note in the first quarter, with the benchmark S&P BSE Sensex index rising 5.74 per cent.