India's Global Market Capitalization Share Declines Amid Bearish Trend
India's global market cap share falls after D-Street's slide this year
The Economic TimesImage: The Economic Times
India's share in global market capitalization has fallen to just under 3% due to a sustained bearish trend in domestic equities, with benchmark indices losing nearly 13% since early 2026. This decline follows a record outflow of foreign portfolio investment, impacting India's market position despite retaining the fifth spot globally.
- 01India's global market cap share has dropped to under 3%, down from over 4.6% in 2024.
- 02Benchmark Indian equity indices have lost nearly 13% since the start of 2026.
- 03Foreign portfolio investors have recorded a significant outflow of $18.9 billion in 2025.
- 04India's market capitalization was $4.9 trillion as of May 12, 2026.
- 05Despite the bearish trend, India's P/E ratio remains competitive compared to other global indices.
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India's share in global market capitalization has decreased to just under 3%, a significant drop from over 4.6% in 2024, primarily due to a sustained bearish trend in domestic equities. Since the beginning of 2026, benchmark Indian equity indices have lost nearly 13%, largely influenced by aggressive selling from foreign portfolio investors (FPIs). In 2025, FPIs reported a record outflow of $18.9 billion (approximately ₹1.7 lakh crore), driven by a weaker rupee and rising inflation, exacerbated by the ongoing West Asian crisis affecting energy imports. Year-to-date, FPIs have sold equities worth $23.1 billion (around ₹2.2 lakh crore) in 2026, with significant selling occurring early in the year. Despite these challenges, India maintains its position as the fifth largest market globally, with a market capitalization of $4.9 trillion as of May 12, 2026, slightly ahead of Taiwan and South Korea. The price-earnings (P/E) ratio for Indian indices stands at approximately 20.6, which is competitive compared to many global indices, although lower than American indices that range between 22 and 38.
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The decline in market capitalization may lead to reduced investor confidence and impact the availability of capital for businesses in India. Homebuyers and investors may face challenges in the current economic climate.
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