After approximately ₹2 lakh crore of foreign-portfolio-investor outflows in 2025, Indian stock markets are signalling a potential return of foreign capital. According to a report by Elara Capital, India’s resilient macroeconomic backdrop, moderating valuations and stabilising earnings revisions are drawing renewed investor interest. Mid-cap stocks, in particular, are seen as beneficiaries of this shift. Analysts emphasise that sustained fund flows will depend on earnings momentum and global risk appetite.

Emerging-market equities are experiencing their best performance in over 15 years, with the MSCI Emerging Markets Index up around 28 % in 2025. Investors cite a weaker U.S. dollar, stronger earnings in tech and semiconductors, and recovering investor sentiment in regions such as Latin America and Asia. While developed-market gains remain modest, flows into emerging markets are still low, suggesting further upside potential. India is noted as a laggard due to stretched valuations despite the global rebound.