India's weight in MSCI EM at 2-yr low

Decline follows a year of relative underperformance

- SAMIE MODAK

India's weight in the MSCI Emerging Markets (EM) index has dropped to its lowest in nearly two years, as the underperformance of domestic equities drags down its standing in the benchmark widely tracked by global investors.

At the end of August, India's share stood at 16.21 per cent—the lowest since November 2023—marking a steep fall from its July 2024 peak of 20 per cent, when it had come within 4.5 percentage points of China, the index heavyweight. India has also slipped one notch to third place, behind Taiwan.

A similar trend is evident in the MSCI EM Investable Market Index (IMI). After securing the top slot in August 2024, India has now slipped to third position, with its weight falling to 17.47 per cent from 22.3 per cent a year earlier.

The decline follows a year of relative underperformance. While the MSCI EM index has gained 16 per cent in the past 12 months, India's benchmark Nifty50 has declined 2 per cent.