For two years, India was the darling of global capital.
The "next China." The can't-miss trade. The story everyone wanted a slice of.
In 2026… that story is unraveling fast.
💸 Foreign investors have yanked $8.5 billion out of India-focused equity funds this year alone.
And more than half of every dollar that rushed in after March 2023 — gone.
This isn't a small re-balance.
It's a stampede.
55% of the post-2023 foreign inflows into India have now been redeemed — most of it draining out of Luxembourg and Japan-domiciled funds.
And where is all that money running to?
One place.
The US AI trade.
US equities just pulled in their biggest weekly inflow ever — $120 billion. Mostly through ETFs.
The breakdown is wild:
The dollar index? At a one-year high.
The message from global money? Higher-for-longer rates, and we want US tech.
Here's the brutal part.
Elara Securities put it plainly: "India remains a funding source for this global rotation."
Translation: managers are selling India to buy Nvidia, TSMC and Samsung.
Taiwan just pulled in $1.3B. South Korea $600M. Both are now AI-supply-chain proxies — together they're 52% of the entire emerging markets index.
India and China? Still bleeding. $440M and $1.7B out last week.
This isn't just a spreadsheet story.
Nifty has wobbled. The rupee is feeling it. And the "India premium" story is, for now, on mute.
India's fundamentals haven't suddenly cracked.
Growth is intact. Earnings are okay. Demographics still gorgeous.
But none of that matters when the world is chasing one trade — and that trade has a Silicon Valley zip code.
For now, global capital has picked its hero.
And India is paying the entry fee.
That's all for now!
