As foreign institutional investors continue to withdraw from Indian equities, domestic investors are stepping up to support the market. Gautam Trivedi from Nepean Capital emphasized that domestic institutional investors have injected nearly $35 billion this year, offsetting $22 billion in foreign outflows. He pointed out that India is currently the second worst-performing emerging market, with an 8% decline year-to-date, trailing only Indonesia. Trivedi noted that the divergence between the economy and stock market is not unusual, as foreign investors are increasingly attracted to markets with AI-driven growth opportunities, such as Korea and Taiwan. Despite this, domestic retail participation is on the rise, with about 130 million unique investors, although equity ownership is concentrated in a few states. The sustained inflow into mutual funds indicates growing confidence among domestic investors, driven partly by the search for better returns compared to traditional savings instruments. Trivedi remains optimistic about sectors like power, hospitality, and exporters, while expressing caution regarding the IT sector's adaptation to AI advancements.