India's Finance Minister says easy exits and excess liquidity fuel equity market's underperformance
India's finance minister said that continued capital outflows are one of the biggest risks for the country in 2027.
TL;DR
- Excess liquidity and easy exits are causing underperformance in India's equity market.
- Foreign investors have recorded significant outflows from Indian equities this year.
- Capital is flowing towards AI hubs like Taiwan and Korea, reducing India's market share.
- Domestic capital continues to flow into Indian equity mutual funds.
- The Finance Minister believes India is no longer a laggard in frontier tech and is investing in semiconductor manufacturing.
- India is not expected to be significantly harmed by a potential burst of the global AI bubble.