AI stocks have seen some selling lately, sparking speculation of an anti-AI trade amid bubble concerns, while India's limited participation in the global AI rally has been a key factor behind FPI selling and the Indian stock market's underperformance over the past year. Devarsh Vakil, Head of Prime Research at HDFC Securities, noted that India’s weighting in the MSCI EM index dropped significantly from its peak of 20 on 31 July 2024 to 11.9 on 30 April 2026, an absolute decrease of 8.1 points, a 40.5% reduction from its 2024 level. In contrast, Korea’s weight surged from 12.1 in July 2024 to 18.7 in April 2026, an absolute increase of 6.6 points, a 54.55% percentage increase, while Taiwan climbed from 18.4 in July 2024 to 24.8 by April 2026, an absolute increase of 6.4 points, a 34.78% percentage increase. Experts underscore the AI trade may be entering a consolidation phase, and Vakil said if AI-linked stocks correct, index weights of those countries would decline, raising India's relative weight and compelling passive ETF investors to reallocate, bringing fresh inflows into India. Vakil highlighted that India's diversified earnings base, improving macro fundamentals, rupee stability, credible central bank, and maturing