The hidden reason global capital is looking beyond India for future growth

Foreign investors have steadily pulled money out of India, with FII ownership of NSE-listed companies falling to a seventeen-year low by March 2026 and record equity selling during the last financial year. A large share of this capital is rotating into markets like Taiwan and South Korea, which offer direct exposure to the AI and semiconductor boom that Indian markets largely lack. The article highlights structural concerns including a narrow opportunity set dominated by traditional sectors, limited first-generation new-age companies, and an execution-over-invention gap, raising questions about India's valuation premium over other emerging markets and adding long-term pressure on the rupee.