Nirmala Sitharaman, India’s financing minister, throughout the International Monetary Fund (IMF) and World Bank yearly conferences in Bangkok, Thailand, on Thursday, Oct. 15, 2026.
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Excess liquidity in India’s equity market has actually added to underperformance and might continue to do so, according to Finance Minister Nirmala Sitharaman.
“Because of the ease of liquidity, ease of availability, people are even exiting easily” from equities, Sitharaman informed CNBC in a special interview on the sidelines of the IMF-World Bank conferences in Bangkok on Friday. The principles of the Indian economy are “fine,” she stated.
Because January, India’s crucial criteria indexes have actually slipped almost 12%, based on LSEG information, although the nation’s financial development has actually been resistant in the middle of trade unpredictability and geopolitical shocks. India has actually been struck with record outflows by foreign financiers from its equity markets, and Sitharaman stated that ongoing capital outflows are among the greatest threats for India in 2027.
Still, domestic capital continues to flood the marketplace. Indian equity shared funds have actually taped net inflows each month given that March 2021, according to information launched by market body Association of Mutual Funds in India previously this month.
International business, personal equity funds and foreign financiers have actually had the ability to make partial or complete exits from their financial investments at a premium. In between 2021 and 2025, Indian going publics jointly raised $60.4 billion, of which “a staggering” $37.7 billion, or 63% of overall earnings, went to existing holders who offered their shares to the general public, an EY report in August stated.
Anti-AI Play
Foreign portfolio financiers have actually offered direct Indian equities of over $33 billion up until now this year, based on Indian depository company NSDL. India has actually gotten a credibility as an anti-artificial intelligence trade, while markets like Taiwan and Korea, with AI champs, have actually drawn in strong financial investment circulations.
The flight of capital towards AI and the U.S., which otherwise approaches various nations for various sectoral financial investments, is “a concern,” she included.
Taiwan now has the biggest market weighting in the MSCI Asia Pacific ex-Japan index at 29%, while Korea has actually moved into 2nd location at 22%, based on a report by Goldman Sachs on Oct. 8. India’s share has actually compressed from 19% a couple of years ago to 10%, it included.
With the international AI rally revealing fractures, Sitharaman stated India would not be “hurt” from any spillover if the bubble burst. India has actually not gotten the “AI kind of investments coming into different jurisdictions,” she stated.
Sitharaman, who is India’s longest-serving financing minister to hold the workplace constantly, included that the South Asian nation was “no longer a laggard” in the frontier tech area and financial investment was being made to establish semiconductor production.
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