India Drops to Fourth in MSCI Emerging Markets Index as Weight Falls Below 14%

India's weight in the MSCI Emerging Markets Index has declined from nearly 21% in September 2024 to below 14% by January 2026, causing its rank to fall from second to fourth. This shift reflects investor preference for AI and semiconductor-driven firms in China, Taiwan, and South Korea. Factors include China's stimulus-driven rally, slower Indian growth, foreign outflows, and currency depreciation. While India remains dominated by financials and IT services, experts note the risk of further decline but do not see it as inevitable.