India Slips To Fourth In MSCI EM Index As Weight Falls Below 14%

India’s representation in the MSCI Emerging Markets Index has slipped to fourth place as its country weight fell below 14% by January 2026.

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The decline marks a reversal from September 2024, when India held the second-largest weight in the benchmark at close to 21%.

Current MSCI Emerging Markets Index Weights

China currently holds the largest weight in the MSCI Emerging Markets Index at 26.58%.

Taiwan follows as the second-largest constituent with a weight of 21.04%.

South Korea ranks third with a weight of 15.65%.

India now occupies the fourth position with a weight below 14%.

Brazil accounts for 4.63% of the index weight, while other emerging markets together make up 18.75%.

Historical Trend In India’s Index Weight

India’s weight in the MSCI Emerging Markets Index stood at about 9% in 2020.

The country’s share rose steadily over the following years, driven by gains in market capitalisation and increased representation in global portfolios.

By September 2024, India’s index weight had peaked near 21%.

The subsequent decline has taken place over the past year as other emerging markets recorded stronger growth in market capitalisation.

Market Capitalisation And Index Methodology

Country weights in the MSCI Emerging Markets Index are determined by free-float adjusted market capitalisation.

Movements in equity prices and exchange rates influence relative weights within the benchmark.
India’s market capitalisation in dollar terms declined relative to other large emerging markets during this period.

Foreign institutional investor outflows and currency movements also contributed to the adjustment in index weight.

Performance Across Major Emerging Markets

Since the start of 2024, Indian equity benchmarks recorded modest gains in dollar terms.

The Sensex rose 4.6% in dollar terms, while the Nifty gained 7.6% over the same period.

In comparison, other major emerging markets posted stronger returns.

China’s Shanghai Composite rose 46% in dollar terms.

Taiwan’s equity market gained 96%.

South Korea’s Kospi advanced 116%.

Sector Representation Differences

Sector composition has also influenced changes in index weight.

Taiwan and South Korea have significant exposure to semiconductor and hardware manufacturing companies.

These sectors saw sharp increases in global market value over the past year.

China’s index weight benefited from gains in selected large-cap sectors.

Indian equity benchmarks remain dominated by financial services, consumer staples, and IT services companies.

These sectors recorded slower market value expansion compared with hardware-focused segments.
Index Implications

The MSCI Emerging Markets Index is widely tracked by global passive and active funds.

Changes in country weights influence benchmark-linked allocations.

India’s move to fourth position reflects relative shifts in market capitalisation rather than changes in index inclusion.

Index weights continue to adjust in line with equity market performance across constituent countries.