Global markets

India is the emerging market that isn't one big tech bet

Aabhas TripathiAabhas Tripathi19 August 2026

The AI rally has quietly rebuilt the emerging-markets index around a single trade. Technology now makes up 87.9% of MSCI Taiwan and 74.2% of MSCI Korea, and those two markets have ridden the theme to 27.3% and 23.7% of the MSCI EM index respectively. India, which held roughly 20% of the index in 2024, has slipped to 11.1%. Buying the EM index today is, to a first approximation, buying Asian semiconductors with a diversifier attached.

MSCI Taiwan · 27.3% of EMTechnology share of MSCI Taiwan · 87.9%All other sectors · 12.1%Tech 87.9%MSCI Korea · 23.7% of EMTechnology share of MSCI Korea · 74.2%All other sectors · 25.8%Tech 74.2%MSCI India · 11.1% of EMTechnology share of MSCI India · 6%All other sectors · 94%. Largest: financials 31%, consumer discretionary 12%, industrials 12%, materials 9%, energy 8%Tech 6% · financials 31% · consumer 12% · industrials 12%
Technology's share of MSCI country indices, and each country's weight in MSCI EM, as of 30 June 2026. MSCI India's other large sectors: materials 9%, energy 8%, healthcare 6%, staples 6%. Data: Jefferies, Bloomberg.

India’s index is built differently. Its largest sector is financials at 31%, followed by consumer discretionary and industrials at 12% each, with technology at just 6%. No single theme can carry it, and no single theme can sink it. That construction is precisely why India underperformed for the past year, when one theme was all anyone wanted, and why the sharpest month of AI doubt saw Korea fall 22% while diversified markets barely moved.

The ten-year record shows what the past year obscured: India compounded at 8% a year in dollar terms over June 2015 to June 2025, ahead of every emerging market except Taiwan, without ever being a single-sector story. The recent reversal, where India sits at the bottom of the one-year EM table while Korea tops 200%, is the mirror image of concentration working, for now, in the other direction.

For an Indian investor the practical reading runs through allocation. Global and EM index products are more concentrated in one theme than their labels suggest, and a portfolio holding them alongside AI-heavy US exposure is stacking the same bet twice. Diversification currently looks like underperformance. It usually does, right up until it doesn’t.

What we’ll watch: India’s weight in the EM index as a marker of the rotation, and whether FPI flows into India turn as the AI trade’s concentration risk gets repriced.

Source: Data: Jefferies, Bloomberg; as of 30 June 2026.
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