India’s Share In Global Market Cap Falls Below 3%

India’s share in global market capitalisation declined to 2.996% as of May 11, marking the first time since March 2022 that the country’s weight has fallen below the 3% level.

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The decline comes after India’s share had reached a peak of 4.71% in September 2024 before steadily moderating over the past several months. It eased to nearly 4.2% by December 2024 and further dropped to 3.5% by December 2025.

The latest fall has been driven by sustained foreign institutional investor outflows, rising crude oil prices and pressure on domestic equity markets following continued tensions involving Iran, Israel and the U.S.

Indian Markets Under Pressure In 2026

India’s total market capitalisation currently stands at around $4.91 trillion, down nearly 7% from the beginning of 2026.

Benchmark indices have also witnessed sharp declines during the year. In 2026 so far, the Sensex is down 11% and the Nifty is off 9%.

Broader markets, however, have shown relatively better resilience. The BSE MidCap 150 index remained largely flat during the period, while the BSE SmallCap 250 index gained nearly 3%.

Global market capitalisation currently stands at around $163.71 trillion compared to nearly $151 trillion at the start of the year.

China, Taiwan Gain Share In Global Market Cap

While India’s share declined, several Asian markets recorded gains in global market capitalisation share during the same period.

China’s share rose to 9.62% from 8.9% at the start of 2026, while Japan’s contribution increased to 5.22% from 5.1%.

Taiwan recorded one of the sharpest gains, with its share rising to 2.91% from 2.2%. South Korea’s share also increased to 2.87% from 1.78%.

The U.S. remained the largest contributor to global market capitalisation despite a marginal decline in its share to 47.25% from 48% earlier this year. Hong Kong’s share slipped to 4.6% from 4.81%.

Foreign Outflows And Oil Prices Weigh On Sentiment

Foreign institutional investors have withdrawn nearly $21 billion from Indian equities so far in 2026 amid concerns around elevated oil prices and inflationary pressures.

Crude oil prices have remained above the $100-per-barrel mark following disruptions linked to the West Asia conflict. Rising energy prices are a big concern for markets and the economy at large as India imports more than 85% of its crude oil.

Market sentiment also weakened after Prime Minister Narendra Modi urged citizens to reduce fuel consumption, avoid non-essential foreign travel and postpone discretionary gold purchases for a year to conserve foreign exchange reserves.

Several global brokerages have also revised their outlook on Indian equities in recent months. According to reports, UBS, Morgan Stanley and Nomura lowered their stance on Indian markets in March, followed by JPMorgan, HSBC and Goldman Sachs in April. Citi also reportedly revised its outlook in early May.

The brokerages cited high market valuations, rising crude oil prices, rupee weakness and pressure on corporate earnings as key reasons for their cautious stance on Indian equities.