New Delhi: India’s stock market has fallen below the $4-trillion mark for the first time in over 14 months. A weakening rupee and a sharp drop in stocks have contributed to the decline.
India has seen the steepest market capitalization drop globally in 2025. The market has fallen by 18.33 percent, the worst among all major economies. Zimbabwe follows with an 18.3 percent drop, while Iceland ranks third with an 18 percent decline.
India’s total market cap now stands at $3.99 trillion, its lowest since December 2023. This marks a $1 trillion loss from its peak of $5.14 trillion in mid-December.
The rupee has also weakened by nearly 1.5 percent against the US dollar this year. It is the second-worst performing currency in Asia, after the Indonesian Rupiah.
In contrast, the U.S. market capitalization has risen by 3 percent. China and Japan have gained 2.2 percent each, while markets in the UK, France, and Canada have also grown.
The decline in India’s market was driven by a 2.6 percent drop in Sensex and Nifty. Broader indices, such as BSE MidCap and SmallCap, have fallen over 12 percent and 15 percent, respectively.
Foreign investors have pulled out over $10 billion from Indian equities this year. Concerns over slowing growth, weak earnings, and high valuations have added to the pressure. Fears of a potential tariff war under U.S. President Donald Trump have further dampened investor sentiment.
Experts have also warned about market risks. ICICI Pru AMC’s CIO, S. Naren, advised caution in mid and small-cap funds due to volatility. Valuation expert Aswath Damodaran said Indian equities remain expensive compared to global markets.
Despite India’s rapid economic growth, its stock market is facing strong headwinds. Investors remain cautious as uncertainty looms.
