With $25 billion withdrawn in just nine months, some foreign investors have cut their Indian positions to zero—how did India’s ‘pig-butchering’ schemes and exorbitant penalty bills ruin everything?

India’s stock market is currently facing a potential collapse. According to reports by Bloomberg and India’s *The Print* in September, global investor confidence in Indian equities has markedly weakened, prompting overseas funds to slash their Indian asset allocations—or even exit entirely. Before 2026 ends, foreign investors have already net sold approximately $25 billion worth of Indian stocks; the foreign ownership stake in companies listed on India’s National Stock Exchange (NSE) has fallen to its lowest level in seventeen years. In a recent survey targeting Asian fund managers, India ranked dead last—labeled the 'least favored market.' Bloomberg recently cited multiple asset management firms reporting that some global investors are reducing their allocations to Indian equities, with certain institutions having fully exited the market. Recall: just two years ago, global capital viewed India through an entirely different lens. Demographic dividends, the ‘China+1’ strategy, ‘Make in India,’ digital economy expansion, and global supply-chain realignment—all were enthusiastically layered onto India’s narrative. Investment seminars on India followed one after another. Back then, Wall Street had a popular saying: “India—or bust.” Today, that phrase has quietly shifted—to “Not choosing India? No big deal.” So what exactly happened in between? Capital fears not poverty—but rules that change overnight. In the short term, the stock market is a voting machine; in the long term, it’s a weighing machine—and the weight beneath that scale is called *certainty*: Will the money I invest and the profits I earn still belong to me tomorrow? India shattered precisely this weight. Over recent years, India’s reputation for ‘pig-butchering’ has spread widely: first inviting you in with favorable policies and open markets, letting you build factories, expand your customer base, and fatten your profits—then suddenly striking with a decisive blow. In 2024, India revised its *Competition Act*, changing the penalty base from ‘local revenue’ to ‘global turnover.’ Even if you’ve just launched operations in India, authorities can use your entire global business volume as the denominator for calculating fines—effectively suspending a sword over every multinational’s head. Apple, generating several billion dollars annually in India with only a 2% market share, now faces a potential antitrust fine of up to $38 billion in 2026—calculated against its global services revenue. That would erase Apple’s entire 14.5 years of earnings in India. After enduring multiple rounds of such ‘harvesting’ by Indian authorities, Coca-Cola received yet another tax reassessment bill last year—amounting to ₹250 billion (roughly RMB 17 billion), covering seven fiscal years plus penalties and interest. Pernod Ricard—the French spirits giant behind Chivas Regal, Royal Salute, and Glenlivet—was ordered by Indian tax authorities in May 2026 to pay approximately $314 million in back import duties. If penalized under Indian law, the total could exceed $600 million—equivalent to three years of zero profit. Samsung was hit with a $601 million back-tax demand—nearly wiping out its entire annual profit in India. Volkswagen received a retroactive penalty of $1.4 billion and ultimately surrendered controlling stakes in its Indian subsidiary in July 2026. Turkish airline ground-handler Çelebi Aviation, which had operated steadily in India for 17 years, disclosed this year that it suffered a nationally orchestrated ‘pig-butchering’ incident last year: its $500 million brand value, physical assets, and distribution channels vanished overnight—contracts terminated simultaneously across nine airports, with local service providers immediately stepping in to take over. All 17 years of accumulated assets in India were wiped out in a single day. This company had operated prudently for over half a century, expanding operations to seventy airports worldwide—yet never encountered such a catastrophic setback in any other country.

Let’s talk about the Indian stock market: Why do people say the vision is beautiful—but reality is harsh?

Today, let’s discuss India’s stock market. This is a detailed, in-depth article—4,000 words long. I spent considerable time over the weekend gathering data—so feel free to bookmark it! This piece was originally started in March last year, but remained unfinished when former President Trump announced his ‘reciprocal tariff’ policy—triggering synchronized global market declines. In March this year, regional tensions in the Middle East again caused broad-based global selloffs. Only recently—over the past week—have global markets surged sharply: indices like the Nasdaq and Japan’s Topix have already recovered all losses incurred since the outbreak of the Iran conflict (though geopolitical risks may persist and recur). India’s benchmark index has *not* reached new highs—so why write about India now? Because among major national markets, India’s equity index currently trades at the lowest valuation—still stuck deep in a valuation pit. Is this, then, an opportunity? 1. Basic Facts About India’s Stock Market India has two nationwide stock exchanges: the Bombay Stock Exchange (BSE)—founded in 1875, listing over 5,000 companies—and the National Stock Exchange (NSE)—established in 1992, listing over 2,000 companies. Both are headquartered in Mumbai. India’s three most important stock indices are: the SENSEX30 (issued by BSE), the Nifty50 (issued by NSE), and the MSCI India Index (widely used internationally). Their constituent stocks number roughly 30, 50, and 136 respectively. SENSEX30 and Nifty50 share highly overlapping components and nearly identical performance—correlation coefficient: 0.99. The MSCI India Index shows slightly lower correlation—around 0.95—with the other two. In terms of returns, SENSEX30 and Nifty50 have historically delivered marginally higher long-term gains than the MSCI India Index—but overall, all three have performed strongly. Later sections will analyze SENSEX30’s return profile in detail. Among them, the SENSEX30 is the most renowned—essentially synonymous with India’s stock market (akin to China’s CSI 300). Launched on January 1, 1986, it uses April 3, 1979 as its base date and sets the base value at 100. It is a market-capitalization-weighted index comprising 30 large-cap, highly liquid stocks listed on the BSE. Market Capitalization: India’s stock market surged in 2024, briefly surpassing $5.5 trillion in mid-year—ranking fourth globally, behind only the U.S., China, and Japan. During last year’s reciprocal tariff turmoil, market cap shrank to $4–4.5 trillion; it has since rebounded to around $5 trillion. Ownership Structure: Corporations hold the largest share—approximately 40–50%. Domestic institutional investors (DIIs) account for ~20%; foreign institutional investors (FIIs) hold ~16–18%; retail investors make up ~15%. Yet in daily trading activity, retail investors remain the most active group. Historically, FIIs held larger shares than DIIs—but in 2023, FIIs recorded the highest net inflows: roughly ₹2 trillion (about $24 billion). That year saw rising expectations of Federal Reserve rate cuts, boosting FII appetite for emerging markets—and India’s robust economic growth (GDP >7%) further reinforced the appeal. By September 2024, India’s SENSEX30 index hit a record high of 85,800 points. Interestingly, the Fed’s first rate cut in this cycle also occurred in September 2024. Yet following the official launch of the easing cycle, the SENSEX30 failed to reach new highs.

Indian Shares Set to Open Lower as Crude Oil Rises Above $100; NSE Listing in Focus

16 hours ago

Indian equities are set to decline as Brent crude oil surpasses $100 per barrel due to geopolitical tensions. Market attention also focuses on the National Stock Exchange of India's listing debut and potential inflationary pressures.

reuters

2026-09-23

Indian Shares Set to Open Lower as Crude Oil Rises Above $100; NSE Listing in Focus

Indian Shares Set to Open Lower as Crude Oil Rises Above $100; NSE Listing in Focus

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