According to Bloomberg data, Taiwan’s market cap rose to around $4.95 trillion, marginally ahead of India’s $4.92 trillion, making Taiwan the world’s fifth-largest equity market after the US, mainland China, Japan and Hong Kong.
The rally in Taiwan has been driven overwhelmingly by TSMC, which now accounts for nearly 42% of the benchmark Taiwan index.
TSMC shares have surged around 49% this year as investors globally poured money into semiconductor and AI-linked companies amid strong demand for advanced chips.
The AI-driven rally has disproportionately benefited technology-heavy markets such as Taiwan and South Korea, while India has faced pressure from high oil prices, foreign investor outflows and slower earnings growth in some sectors.
Global investors have sold nearly $24 billion worth of Indian equities this year as capital shifted toward AI-linked opportunities in Asia, particularly semiconductor manufacturers.Indian equities have also faced pressure from elevated valuations, a weakening rupee and rising energy prices linked to geopolitical tensions in West Asia.The benchmark Nifty is down around 8% this year, putting it on track for its first annual decline in over a decade.
India’s weight in the MSCI Emerging Markets Index has also fallen to around 12% from nearly 19% last year.
Despite the decline in market cap rankings, India’s broader economic fundamentals remain significantly larger than Taiwan’s.
India’s economy is estimated at around $4.15 trillion compared with Taiwan’s roughly $977 billion economy, according to IMF estimates.
Pandey’s comments also indirectly highlight one of the key structural differences between the two markets.
While Taiwan’s stock market is highly dependent on a single global technology leader, India’s market capitalisation is spread across financials, energy, consumer companies, industrials, telecom, pharmaceuticals, IT services and manufacturing businesses.
Market experts say this diversification provides greater resilience during sector-specific volatility, although it may also limit the kind of concentrated gains seen in AI-driven markets.
Taiwan’s rally has also received support from regulatory changes.
The island’s financial regulator recently increased the investment limit domestic funds can allocate to a single stock from 10% to 25% for companies with benchmark weightings above 10%.
Currently, only TSMC qualifies under that rule.
JPMorgan had earlier estimated the move could attract more than $6 billion of additional inflows into Taiwan’s equity market.
For India, however, the challenge remains balancing valuations, earnings growth and foreign investor sentiment at a time when global capital is increasingly chasing AI-linked opportunities.
