India’s share in global market capitalization edged higher in September but still lags behind levels seen a year ago, reflecting weaker market momentum compared to global peers.
As of September 3, India’s market capitalization stood at $5.14 trillion, accounting for 3.65% of the global total of $140.81 trillion. This marks an improvement from August’s 3.57% share but remains significantly below the 4.52% share recorded in September 2024.
Position Among Global Peers
India currently ranks fifth in global market capitalization, behind the US, China, Japan, and Hong Kong. The US continues to dominate with nearly 48.2% of the global share.
According to Motilal Oswal Financial Services’ Bulls and Bears Valuation Handbook (September edition), India’s share slipped to a 16-month low of 3.6% in August, highlighting its relative underperformance at a time when many global markets scaled record highs.
Despite this slowdown, India remains one of the top 10 contributors to global equity wealth, with leading economies collectively accounting for 82.8% of worldwide market cap.
Diverging Market Trends
Global market capitalization rose by nearly $6.5 trillion since June and $21.1 trillion year-on-year, supported by strong recoveries in the US, China, Japan, and Germany. In contrast, India’s market cap has remained broadly flat and even declined 9.3% year-on-year, making it one of only two major economies—along with Brazil—to report a contraction.
Domestic equity performance reflected this weakness as the Nifty slipped 1.4% in August, extending its losing streak for the second month. On a comparative basis, China gained 8%, Brazil 6%, Japan 4%, and the US 2%, while India lost 1%.
On a 12-month basis in USD terms, the MSCI India Index fell 11%, sharply underperforming the MSCI Emerging Markets Index, which rose 14%. However, India still maintains a strong decade-long record, having delivered 62% outperformance against the EM benchmark.
Valuation and Investor Sentiment
Analysts point to earnings pressure, persistent foreign institutional investor outflows, and stretched valuations as key drags. The MSCI India Index trades at a 65% premium to the MSCI EM Index, only slightly below its long-term average premium of 80%.
India’s market capitalization-to-GDP ratio stands at 178%, one of the highest globally and well above its long-term average of 87%. Experts suggest this reflects sustained investor confidence in India’s long-term story, even if short-term pressures weigh on sentiment.
Vikas Gupta, CEO of Omniscience Capital, noted that market volatility is natural.
“There is no rule that all markets move up or down together. In September 2024, India was relatively overvalued compared with global markets; today, it may be fairly valued or even undervalued.”
Outlook
India’s earlier momentum in 2024 was supported by foreign inflows and strong earnings, but profit-taking and capital reallocation toward the US slowed activity in 2025. Analysts believe India’s higher economic growth compared with peers should lift its global market share over the medium term, even if valuation multiples stabilize.
🔑 10 Key Takeaways
- India’s market cap: $5.14 trillion (3.65% global share as of Sept 3).
- Slight improvement: Up from 3.57% in August but below 4.52% a year ago.
- Global rank: 5th largest after US, China, Japan, and Hong Kong.
- US dominance: Holds 48.2% of global market capitalization.
- Global rally: $21.1 trillion added worldwide in the past year, while India fell 9.3%.
- Domestic weakness: Nifty fell 1.4% in August, marking the second straight monthly decline.
- Comparative performance: China (+8%), Brazil (+6%), US (+2%) vs. India (–1%) in August.
- MSCI India Index: Down 11% YoY vs. MSCI Emerging Markets Index (+14%).
- Valuations remain high: MSCI India trades at a 65% premium to EM peers.
- Outlook: Experts see long-term growth intact, supported by GDP expansion, reforms, and earnings recovery.
Disclaimer:
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