A weakening currency and a collapsing stock market have caused India’s market capitalization to go below $4 trillion for the first time in more than 14 months.
The nation, which has the fifth-largest stock market in the world, saw the biggest drop in market value worldwide in 2025, with an 18.33% drop. According to Bloomberg data, Iceland is in third place with an 18% fall, followed by Zimbabwe with an 18.3% decline.
India’s market capitalization has dropped by an astounding $1 trillion, from a peak of $5.14 trillion in mid-December to $3.99 trillion, its lowest since December 4, 2023. The Indian rupee, the second-worst currency in Asia after the Indonesian rupiah, has lost around 1.5% against the US dollar so far this year.
While broader indices like BSE MidCap and SmallCap have fallen more than 12 and 15 percent, respectively, the main indices Sensex and Nifty have declined 2.6 percent so far this year, causing a severe correction in the Indian market.
With almost $10 billion leaving Indian stocks this year due to worries about slowing growth, low profitability, and high valuations, the decline has been made worse by ongoing outflows of foreign investors. Sentiment has also been tempered by worries about a possible tariff war under US President Donald Trump.
Despite the nation’s strong economic expansion, Indian stocks continue to rank among the most costly in the world. Interestingly, so far this year, China’s Shanghai Composite has performed better than India’s benchmark Sensex.
All outstanding shares are used to calculate the market capitalization. Since ETFs and ADRs do not directly represent firms, they are not included in Bloomberg data. To prevent double counting, it only includes primary securities that are actively traded on the nation’s markets. Consequently, compared to market capitalization values of a nation’s exchanges from other sources, the values will be far lower.
