India is not the emerging market that has seen the largest outflows of foreign capital so far this year. While the country has recorded outflows of over $18 billion in 2026—close to a record—this is still lower than some of its peers.
According to Bloomberg data, South Korea has experienced significantly higher outflows, with nearly $34 billion exiting its equity market between January and now, almost double the amount seen in India.
Other emerging markets have also witnessed foreign selling, though to a lesser extent. Taiwan has seen outflows of around $8 billion, followed by Indonesia with approximately $2.4 billion.
Country | Year-to-date outflows ($ bn) |
S. Korea | -34.10 |
India | -18.33 |
Taiwan | -8.00 |
Indonesia | -2.36 |
Vietnam | -1.38 |
However, the scale of outflows from South Korea needs to be viewed in the context of its strong market performance in the previous year. In 2025, the KOSPI Index surged by as much as 76%, compared to a gain of just 11% in India’s Nifty 50. This sharp rally created room for profit booking, which partly explains the magnitude of the recent sell-off.
Geopolitical tensions in West Asia have also weighed on global markets. As major oil importers, both India and South Korea saw their equity markets decline—by around 12% and 20%, respectively—during the period of heightened uncertainty. While most emerging markets have since recovered their losses, India’s market remains about 3% below its pre-conflict level.
In March alone, India recorded its highest-ever monthly foreign outflow of $14.2 billion, largely driven by weakness in the Indian rupee. The currency fell to a record low of 95.13 against the US dollar during the month. Overall, the rupee has depreciated about 3.5% so far this year. In comparison, the South Korean won has performed relatively better, declining by around 1.8% over the same period. In 2025, the contrast was even sharper, with the rupee weakening nearly 5% while the won appreciated by about 2.2% against the US dollar.
Despite the recent outflows, global investment firms such as Goldman Sachs and JPMorgan Chase remain constructive on South Korea. They have raised their targets for the KOSPI, citing strong earnings outlook driven by AI-related semiconductor demand, along with attractive valuations. Goldman Sachs, for instance, lifted its target for the index to 8,000 from 7,000, highlighting robust fundamentals and favorable positioning.
Also Read: RailTel secures ₹86 crore Mumbai civic cloud services order, execution till June 2029
Valuation differences between the two markets are also notable. The KOSPI currently trades at around 8 times one-year forward earnings, whereas the Nifty 50 trades at approximately 18.5 times, reflecting a significant premium for Indian equities.
Another key distinction lies in market composition. India’s market is relatively diversified, with the top ten companies accounting for about 20% of total market capitalisation. In contrast, South Korea’s market is highly concentrated.
Samsung Electronics alone represents more than one-fifth of the country’s total market value, estimated at $3.8 trillion, while SK Hynix contributes an additional 15%. Together, these two companies account for roughly 37% of the overall market, making South Korea far more sensitive to sector-specific and global technology trends than India.
/div>
