India Surpasses China in Key Emerging Markets Index

India has overtaken China as the largest component in the MSCI Emerging Markets IMI index, reflecting its growing economic clout and attractiveness to global investors.

Morgan Stanley analysts view this milestone as a mixed blessing, noting that while it could drive increased foreign portfolio inflows, it may also signal market exuberance.

The shift underscores India’s rising share of global GDP and equity markets, with Morgan Stanley maintaining it as their top pick in emerging markets. The analysts, however, caution that India’s ascendancy could mirror China’s experience, which saw relative underperformance after reaching the top spot in 2008.