The largest MSCI EM market in the world is now India, overtaking China. According to MSCI IMI, India is now leading all emerging markets as of the end of August. China’s share of the index has decreased by 0.5 percentage points since its peak in early 2021, allowing India to overtake France as the world’s sixth-largest market.

India will keep gaining market share due to its strong market performance, new issues, and improved liquidity, predicts global stockbroker Morgan Stanley. In the pan-Asia EM asset allocation strategy, the brokerage chose to stick with its “overweight” bet on India and reiterate its “underweight” call on China. India is currently growing its nominal GDP at a rate three times faster than China, in the low teens. Consequently, the operating and earnings growth patterns of the enterprises in the two countries differ significantly.