Reuters Market Eye - India's volatility index gains 29.6 percent, heading towards its biggest single day percentage gain since June 17, 2009.
India VIX measures the cost of protection via options and is seen by some investors as a "fear" gauge has already marked its highest intraday level since 18 June 2012.
The India VIX is rising at a time when the Nifty fell as much as 4 percent on Friday as blue chips including HDFC Bank were hit across the board on fears that an early rollback of U.S. monetary stimulus would spark selling by foreign investors.
The declines also tracked the rupee, which fell to a record low as central bank measures to tighten capital outflows and curb gold imports were seen as unlikely to prop up the currency and could even spark further selling if they spook foreign investors.
(Reporting by Abhishek Vishnoi)