Indian equity markets gain significant heft in emerging market basket

Country's recent outperformance to China, higher foreign ownership limits boost standing

The Indian equity markets have significantly increased in importance within the emerging market (EM) basket of stocks in recent years. Since 2018, India’s weighting in the Morgan Stanley Capital International (MSCI) EM Index — tracked by passive funds with assets of nearly $500 billion — has doubled, while the number of domestic stocks has grown by almost 70 per cent.

Following the latest rebalancing by MSCI — which will come into effect at the end of this month — India’s weighting in the EM index will reach an all-time high of 16.3 per cent, and the number of stocks will