Indian govt, regulators committed to attracting private capital

There's a false narrative that ESG is a tax when it can deliver better risk-adjusted performance Baer Pettit President & chief operating officer, MSCI

- Ram Sahgal

India is poised to become an increasingly important part of foreign investors' portfolios, notwithstanding the recent spate of selling by them, according to Baer Pettit, president & chief operating officer of global index and analytics provider MSCI.

Backed by fundamentals and New Delhi's commitment to attracting private capital, the trend would continue, increasing global investor interest and focus in India over time, Pettit said. He underscores the importance of energy transition projects for developed and emerging market economies as institutional investors remain focused on managing long-term financial risks and identifying growth opportunities in a rapidly changing world.

Edited experts: How important is India in the scheme of things for MSCI?

Our data shows that India is ranked as the sixth largest by weight in the MSCI ACWI IMI (all-country world investable market index) and the second largest in the MSCI EM IMI (emerging market investable market index), rising from the 13th and 4th positions each in 2020.

The MSCI India IMI Index, which covers approximately 99% of the free float-adjusted market capitalization of the Indian equity universe, is a component of these broader indexes and represents the Indian equity opportunity set.

Transformations in the Indian stock market, such as an increase in IPOs (initial public offerings), changes in foreign ownership rules, and technological advancements have contributed to dynamic changes in market liquidity and the number of constituents in this index.

Over the past few decades, there has been a notable shift in the composition of the index, away from manufacturing and industrial activities that were dominant in the 1990s to a growing prominence of sectors associated with the services economy.