India Falls Behind South Korea in Global Market-Cap Rankings Amid Absence of Nvidia and TSMC Presence

South Korea Surpasses India as Sixth-Largest Equity Market

South Korea has taken the title of the world's sixth-largest equity market, surpassing India, according to data compiled by Bloomberg. This shift is largely attributed to a rally in chipmakers linked to the global artificial intelligence buildout, which has lifted Asian markets beyond what India's listed companies can match.

The combined value of South Korea-listed companies has risen by approximately 86% in 2026 to $5 trillion, driven by Samsung Electronics and SK Hynix. In contrast, India's listed companies have seen their value decline to $4.8 trillion. The gains in South Korea are primarily concentrated in chip stocks, with Samsung and SK Hynix accounting for nearly half of the country's market value.

Chip Stocks Drive South Korea's Growth

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Chip stocks have been the primary drivers of South Korea's growth, with Nvidia now worth more than all listed Indian companies combined. TSMC, a leading contract manufacturer, has seen its share of the global foundry market rise to almost 70% in 2025, up from 64.4% a year earlier, due to booming AI demand.

India's Market Underperformance

India's underperformance is linked to its limited participation in the AI-led rally, alongside persistent foreign outflows and high valuations. A Reuters poll of 24 analysts projected the Nifty 50 to end the year lower for the first time in a decade, with a projected decline of about 8.5% in 2026.

India's Semiconductor Strategy

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India is not absent from the AI market, but its exposure is different from that of South Korea and Taiwan. India's largest technology companies, such as Tata Consultancy Services, Infosys, Wipro, and HCL Technologies, are services firms that deploy AI for clients rather than makers of AI hardware.

Challenges Ahead for India

India's challenge is execution over years rather than announcements. Analysts have flagged the reliability of utilities and infrastructure, as well as the pipeline of skills needed to build and run advanced plants, as the main risks to India's semiconductor push.

India's Semiconductor Mission

The India Semiconductor Mission carries a Rs 76,000 crore incentive outlay, and Micron has established a $2.75 billion assembly and test facility in Gujarat. However, these plants remain years from reaching the scale that would move benchmark indices.

Long-Term Challenges

Building a chip industry beyond assembly and testing requires a full supply chain, infrastructure, utilities, capital, talent, and an ecosystem, which remain long-term challenges for India.