India's 30-Year Underperformance Against EMs: Why Global Funds Are Exiting and When They Might Return
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India's Worst EM Underperformance in 30 Years: Why Global Money is Moving Out
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CNBC TV18•23-02-2026, 21:06
India's Worst EM Underperformance in 30 Years: Why Global Money is Moving Out
•India is experiencing its worst relative performance against emerging markets in 30 years, with a 45% underperformance in 2025.
•Global investors are rotating capital away from India due to powerful earnings cycles elsewhere, particularly in AI infrastructure.
•Markets like South Korea and Taiwan are seeing sharp earnings improvements, benefiting from the global AI boom.
•India trades at a higher valuation (19x two-year forward earnings) with lower earnings growth (15%) compared to other EMs (8-10x earnings, 21% growth).
•Foreign money could return to India if the AI trade falters, policy support increases, or Indian companies show stronger earnings surprises.
