India’s growth in the MSCI Global Index is a clear testament to its rising economic power. Recently, India surpassed China to become the sixth-largest market in the MSCI All Country World Investable Market Index (ACWI IMI) . This achievement is a significant milestone in India's economic journey, reflecting its growing importance on the global financial stage. The MSCI ACWI IMI, which tracks the performance of stocks from both developed and emerging markets, gave India a 2.35% share in August, edging out China’s 2.24%. This shift is more than just a symbolic victory; it mirrors broader economic trends shaping the world today.
The index includes a diverse range of stocks, from large to small companies across 50 countries, representing nearly 99% of the global stock market. India’s increasing share in this index signals not just a strong stock market but the overall health of its economy. This accomplishment comes on the heels of India overtaking China in the MSCI Emerging Markets IMI, where it now holds the largest weight among emerging markets. The growth highlights India’s status as a leading player in the global economy.
India’s robust economic growth is a key factor behind its rise in these indices. The country’s nominal GDP growth is currently in low double digits, far outpacing China. This accelerated growth is driven by strong economic fundamentals and a favorable macroeconomic environment. Additionally, India’s stable political climate and prudent fiscal policies have bolstered investor confidence. The government’s ability to manage inflation, coupled with its fiscal discipline, has helped strengthen market sentiment.
Foreign investments are pouring in, with foreign direct investment (FDI) rising by 47% between April and June 2024 . This influx of capital reinforces India’s stock market and contributes to its growing share in global indices. Market liquidity and structural reforms also play a crucial role in sustaining India’s market growth. Analysts from leading financial institutions point to improved liquidity and market reforms as the backbone of India’s market strength, which is expected to continue gaining ground globally.
Meanwhile, China’s share in the MSCI ACWI IMI has halved since its peak in early 2021. The slowdown in China’s economy and rising concerns about political risks have made global investors reconsider their investments in Chinese markets. In contrast, India’s stable performance has made it a more attractive destination for global capital, especially as investors seek alternatives to China. Experts have noted that India has become a top priority for emerging market investments, further solidifying its standing as an economic powerhouse.
India’s rise in the MSCI ACWI IMI not only reflects market dynamics but also signals the country’s growing role as a leading player in the global economy. With over $4.2 trillion in assets tied to the MSCI ACWI index family, India’s increased share is expected to attract more foreign capital, fueling further growth in its financial markets. Becoming the sixth-largest market in this global index positions India as a vital part of international investment strategies. For institutional investors, India is no longer just an emerging market; it is now a central part of global portfolios.
As India’s current share in the MSCI ACWI IMI stands at 2.35%, there is potential for further growth, as it is only three basis points behind France. Global investors are likely to continue redirecting capital towards India due to its market resilience, economic stability, and promising growth outlook. However, India faces challenges in maintaining this momentum. The country will need to sustain its growth rate, keep inflation in check, and continue implementing reforms to make its business environment even more attractive. Its ability to manage these efforts will determine its long-term success in the global financial landscape.
The index includes a diverse range of stocks, from large to small companies across 50 countries, representing nearly 99% of the global stock market. India’s increasing share in this index signals not just a strong stock market but the overall health of its economy. This accomplishment comes on the heels of India overtaking China in the MSCI Emerging Markets IMI, where it now holds the largest weight among emerging markets. The growth highlights India’s status as a leading player in the global economy.
India’s robust economic growth is a key factor behind its rise in these indices. The country’s nominal GDP growth is currently in low double digits, far outpacing China. This accelerated growth is driven by strong economic fundamentals and a favorable macroeconomic environment. Additionally, India’s stable political climate and prudent fiscal policies have bolstered investor confidence. The government’s ability to manage inflation, coupled with its fiscal discipline, has helped strengthen market sentiment.
Foreign investments are pouring in, with foreign direct investment (FDI) rising by 47% between April and June 2024 . This influx of capital reinforces India’s stock market and contributes to its growing share in global indices. Market liquidity and structural reforms also play a crucial role in sustaining India’s market growth. Analysts from leading financial institutions point to improved liquidity and market reforms as the backbone of India’s market strength, which is expected to continue gaining ground globally.
Meanwhile, China’s share in the MSCI ACWI IMI has halved since its peak in early 2021. The slowdown in China’s economy and rising concerns about political risks have made global investors reconsider their investments in Chinese markets. In contrast, India’s stable performance has made it a more attractive destination for global capital, especially as investors seek alternatives to China. Experts have noted that India has become a top priority for emerging market investments, further solidifying its standing as an economic powerhouse.
India’s rise in the MSCI ACWI IMI not only reflects market dynamics but also signals the country’s growing role as a leading player in the global economy. With over $4.2 trillion in assets tied to the MSCI ACWI index family, India’s increased share is expected to attract more foreign capital, fueling further growth in its financial markets. Becoming the sixth-largest market in this global index positions India as a vital part of international investment strategies. For institutional investors, India is no longer just an emerging market; it is now a central part of global portfolios.
As India’s current share in the MSCI ACWI IMI stands at 2.35%, there is potential for further growth, as it is only three basis points behind France. Global investors are likely to continue redirecting capital towards India due to its market resilience, economic stability, and promising growth outlook. However, India faces challenges in maintaining this momentum. The country will need to sustain its growth rate, keep inflation in check, and continue implementing reforms to make its business environment even more attractive. Its ability to manage these efforts will determine its long-term success in the global financial landscape.
