Driven by AI and the Chip Sector, Market Cap Surpasses ₹415 Lakh Crore; India’s Valuation Stands at ₹413 Lakh Crore
Taiwan has overtaken India in terms of stock market valuation (market capitalization). In the era of Artificial Intelligence (AI), a massive surge in the shares of the world’s largest chipmaker—Taiwan Semiconductor Manufacturing Company (TSMC)—has given Taiwan this lead.
According to Bloomberg, as of Monday, Taiwan’s market capitalization reached $4.95 trillion (approximately ₹415 lakh crore), while India’s valuation slipped to $4.92 trillion (approximately ₹413 lakh crore). Consequently, Taiwan has now joined the ranks of the world’s top five stock markets, following the United States, China, Japan, and Hong Kong.
The primary catalyst behind this surge in Taiwan’s stock market is TSMC. This single company accounts for a 42% weightage in Taiwan’s benchmark index. So far this year, the company’s shares have recorded a gain of 49%. The company holds a dominant position in the global supply of semiconductors (chips) used for AI technology—a factor that is currently benefiting the Taiwanese market.
New Regulations Provide a Boost to Taiwan
Taiwanese regulators recently relaxed investment norms. Domestic funds are now permitted to invest up to 25% of their net assets in a single large-cap company; previously, this limit stood at just 10%. Currently, TSMC is the only company that meets this specific criterion. According to J.P. Morgan, this regulatory change could potentially attract an additional $6 billion (approximately ₹50,000 crore) in investments into the Taiwanese market.
Foreign Investors Withdraw ₹2 Lakh Crore from India
This year has proven to be a challenging one for the Indian stock market. So far this year, foreign investors have withdrawn approximately $24 billion (roughly ₹2 lakh crore) from the Indian market. The primary reasons for this have been the high valuations of Indian equities and the weakness of the Rupee. Conversely, investors are channeling their capital into markets—such as Taiwan and South Korea—that are directly linked to AI hardware and manufacturing.
The Indian Market Lags Behind for These 3 Reasons
High Energy Costs and Inflation: Rising energy costs have heightened inflation concerns in India, thereby impacting growth expectations.
dearth of AI Companies: India lacks companies that are directly involved in global AI infrastructure or hardware manufacturing.
Sluggish Corporate Earnings: The pace of corporate profit growth in India has also remained subdued, leading to a decline in investor confidence.
India Still Far Ahead in Terms of Economic Scale
While Taiwan may have surpassed India in terms of stock market valuation, India retains its dominance regarding the overall size of its economy (GDP). According to IMF projections, India’s economy stands at $4.15 trillion, whereas Taiwan’s GDP is a mere $977 billion. India continues to rank among the world’s fastest-growing major economies.
