3 AI stocks outweigh all of India: Why this concentration is sounding EM alarm bells

Fund managers argue India's Nifty 500, with no fabrication or memory exposure in its top 10 and BFSI at 32-35% of weight, offers a structural advantage versus the extreme concentration in Korea (top 10 at about 65% of KOSPI) and Taiwan (top 10 above 65% of TAIEX), where TSMC alone is 14.2% of MSCI EM. India is building AI capabilities across chip design, data centres, power, cloud, networking, and enterprise software, supported by the around Rs 76,000 crore Semicon India Programme and an 83% increase in FY26 semiconductor allocations to Rs 7,000 crore. The diversification is being framed as a resilience advantage even as global funds that were underweight India begin rotating back.