# India's markets slide as capital flees to AI rivals

> Finance Minister Sitharaman blames easy exits and excess liquidity for India's equity underperformance, as foreign investors flee to AI-focused markets.
- Title: India's markets slide as capital flees to AI rivals · CNBC
- Summary: Finance Minister Sitharaman blames easy exits and excess liquidity for India's equity underperformance, as foreign investors flee to AI-focused markets…
- Keywords: india, nirmala sitharaman, equity markets, capital outflows, artificial intelligence, foreign investors, business, finance, India's, markets, slide, capital
- Source: CNBC — https://cnbc.com/2026/10/18/india-ai-nifty50-sensex-investors.html
- Author: Priyanka Salve
- Published: 2026-10-18T23:00:01+00:00
- Read time: 1 min
- Topics: india, nirmala sitharaman, equity markets, capital outflows, artificial intelligence, foreign investors, business, finance
## India's benchmark indices fall sharply
Since January, India's key benchmark indices have slipped nearly twelve percent, according to LSEG data, despite the country's economic growth remaining resilient.
## Sitharaman blames easy exits and liquidity
Finance Minister Nirmala Sitharaman told CNBC that excess liquidity in India's equity market has contributed to underperformance. Because of the ease of liquidity, ease of availability, people are even exiting easily from equities.

> Because of the ease of liquidity, ease of availability, people are even exiting easily
## Foreign investors flee to AI markets
Foreign portfolio investors have sold over thirty three billion dollars of direct Indian equities this year. India has gained a reputation as an anti-artificial intelligence trade, while Taiwan and Korea attract strong investment flows.
## India's market share shrinks in Asia
Taiwan now has the largest market weighting in the MSCI Asia Pacific ex-Japan index at twenty nine percent, while Korea is second at twenty two percent.
## Capital outflows pose biggest 2027 risk
Sitharaman said continued capital outflows are one of the biggest risks for India in twenty twenty-seven. She added that India wouldn't be hurt from any spillover if the global artificial intelligence bubble burst.
## Key takeaway

India's benchmark indices have fallen nearly twelve percent since January despite resilient economic growth, as foreign investors shift capital to AI-focused markets like Taiwan and Korea.