More than four out of five global emerging‑market funds are currently underweight India. A decade ago, fewer than one in five funds held Indian assets.
HSBC points to this long‑standing underweight as the basis for its claim that India could attract roughly $25 billion if funds were to shift toward a neutral stance.
The trend is beginning to change. Since May, fund managers have reduced exposure to Taiwan by about 0.6 percentage points and trimmed Korea. They have slightly increased positions in India and raised Mainland China holdings by roughly 0.5 percentage points.
HSBC describes this as a broadening of exposure across the region.
At the individual stock level, June data shows funds selling shares of Bharti Airtel, Kotak Mahindra Bank, Eicher Motors, HDFC Bank and IndiGo.
The biggest additions were Adani Ports, Infosys, Hindustan Unilever, ONGC and Hindustan Aeronautics.
Capital flows confirm the shift. Since mid‑June, India has seen net foreign buying. In the same period, Thailand, the Philippines, Malaysia, Indonesia and Vietnam experienced net selling.
Korea and Taiwan saw even larger outflows.
Within India, the strongest buying has been in financials, consumer stocks and healthcare.
HSBC’s $25 billion figure is based on the decade‑long underweight, not just the recent buying activity. The bank’s simple point is that funds have been light on India for years, and even a partial catch‑up could mobilise real money.
The shift suggests that global investors are starting to view India as a more attractive destination for long‑term growth.
If the trend continues, India could see a significant boost in foreign investment, supporting its economic development and market depth.