Can a reversal in global AI trade benefit Indian stock market?

India's weight in the MSCI Emerging Markets index has dropped about 40.5 percent from its July 2024 peak of 20 to 11.9 in April 2026, while Korea and Taiwan have gained ground on the back of the global AI rally. Experts suggest that a correction in AI-linked stocks could trigger passive ETF reallocation back into India, with FII flows already showing early signs of re-engagement. India's structural drivers, including domestic consumption, financial deepening, and manufacturing expansion, are cited as a compelling rotation case, though macroeconomic risks from geopolitical conflicts and a weak monsoon cloud the earnings outlook.