Summary of this article
Global investors increasing India exposure through ETFs
Emerging market inflows revive anti-dollar investment theme
India benefits despite active fund outflows
Global investors may look nervous on the surface, but their money is telling a clearer story. According to the report titled “The Alternate Opinion” by Elara Capital, capital is continuing to rotate decisively into emerging markets, and India is emerging as a key beneficiary, largely through exchange-traded funds (ETFs).
The report notes that flows are reinforcing the broader “anti-dollar” theme, even as commodity prices remain volatile. Despite sharp swings across asset classes, investors have stayed committed to the de-dollarisation trade. “GEM (Global Emerging Markets) equity funds recorded another strong $6.9 billion of inflows this week,” the report said, following $5 billion and $11 billion in the prior two weeks. This marks one of the strongest phases of inflows into emerging markets since the 2016-18 cycle.
Historically, such strong EM(Emerging Markets) inflows have carried important signals. “During 2016–18, the EM index rallied 80%,” the report pointed out, even though there was a brief 10% drawdown after the Trump election. The current momentum, according to the report, “closely resembles the 2016–18 phase,” with EM indices now starting to clear earlier resistance levels, suggesting improving structural strength.
India is clearly riding this wave
The report highlighted that India-focused funds recorded a seven-month high inflow of $217 million, driven entirely by ETFs. These flows came primarily through US and Ireland-domiciled vehicles. “Aggregate India flows have improved sharply over the last three weeks,” the report said, largely reflecting allocations through global emerging market funds.
Interestingly, as per the report, this confidence is being expressed through passive routes rather than active bets. Dedicated long-only India funds, the report noted, have continued to see redemptions since September 2025, mainly from Japan and Luxembourg. Yet, global investors are still increasing exposure to India, just in a more flexible, index-linked way.
Energy flows are telling a similar story. According to the report, energy equity funds are seeing their strongest inflow cycle since June 2020. “Energy equity funds are seeing the strongest inflow cycle since Jun’20,” the report said, reflecting expectations of higher crude prices. In the post-COVID upcycle, crude prices doubled from pre-COVID levels, and the report suggests investors are once again positioning for strength.
Overall, the message from flows is consistent. “Assets aligned with a weaker dollar narrative continue to attract capital,” the report said. For India, this means steady global support, not loud or dramatic, but persistent. Through ETFs, global money is quietly voting for India.
