India's weightage rise in MSCI Global index to boost foreign inflows after two years

BENGALURU, Nov 15 (Reuters): Index provider MSCI raised India's weightage in its Global Standard (Emerging Markets) index to 16.3 per cent from 15.9 per cent on Tuesday, a move likely to increase the flow of foreign funds after a two-year lull.

This marks "a significant increase over the past three years, almost doubling its weight," according to a note by Nuvama Alternative & Quantitative Research.

Foreign portfolio investors (FPIs), who generally use the MSCI indexes as a gauge to allocate their passive flows, have already bought 1,217.05 billion rupees ($14.64 billion) worth of Indian equities this year.

They sold Indian shares worth 1,400.10 billion rupees and 376.32 billion rupees on a net basis in fiscal 2022 and 2023, respectively.

India, which has the second-highest weightage in the index after China's near-30 per cent, could receive inflows of as much as $1.5 billion post the rejig, added the note from the domestic brokerage.