Global fund managers are pulling back from Indian equities at an alarming pace, with foreign ownership hitting a 14-year low.

Global fund managers are pulling back from Indian equities at an alarming pace, with foreign ownership hitting a 14-year low. The shift reflects a fundamental reassessment of India's investment case. While elevated valuations were once justified by strong earnings growth, that growth has slowed significantly in 2024. Meanwhile, competitors like South Korea and Taiwan are capturing investor attention through their dominant positions in the AI semiconductor boom. Rising oil prices and rupee weakness have further eroded India's appeal. Global investors are chasing momentum and concentrated earnings growth rather than diversification, making India's slower-growing but broader economy less attractive at premium valuations. The outflow trend shows no immediate signs of reversing as the AI supercycle continues to dominate emerging market flows.