Winning Bizness Desk
Mumbai.Taiwan has overtaken India in total stock market value, riding on the back of the global Artificial Intelligence boom and the stunning rise of semiconductor giant Taiwan Semiconductor Manufacturing Company (TSMC). The development marks a major shift in Asian financial markets, where investors are now pouring money into countries directly linked to AI hardware and chip manufacturing.
According to Bloomberg data, Taiwan’s market capitalisation touched nearly $4.95 trillion, or around ₹415 lakh crore, on Monday. India’s market value slipped slightly to $4.92 trillion, close to ₹413 lakh crore. With this jump, Taiwan has now entered the world’s five largest stock markets after the United States, China, Japan and Hong Kong.
TSMC becomes Taiwan market backbone
The biggest force behind Taiwan’s rise has been TSMC, the world’s largest semiconductor manufacturer and a crucial supplier for AI technology companies across the globe. The company alone now accounts for nearly 42% of Taiwan’s benchmark stock index, showing how heavily the country’s market depends on its chip industry.
TSMC shares have surged around 49% this year as global demand for AI chips continues to explode.
Key reasons behind Taiwan’s jump:
- Massive global demand for AI chips
- Strong foreign investor confidence
- Heavy dependence on semiconductor exports
- Relaxed domestic investment regulations
Analysts say Taiwan has emerged as one of the biggest beneficiaries of the AI revolution because of its strong hold over semiconductor manufacturing, a sector now considered the backbone of future technologies.
New investment rules fuel fresh inflows
Taiwan’s financial regulators have also played a major role in boosting investor sentiment. Recently, authorities relaxed investment rules for domestic funds, allowing them to invest up to 25% of their net assets in a single large company. Earlier, the limit was capped at 10%.
At present, TSMC is the only company large enough to fully benefit from this rule change. According to estimates by JP Morgan, the decision could attract nearly $6 billion, or about ₹50,000 crore, into Taiwan’s market over time.
Market experts believe the policy has strengthened confidence among institutional investors at a time when AI-linked stocks are witnessing unprecedented global demand.
Foreign investors pull money from India
While Taiwan celebrated fresh inflows, India witnessed continued pressure from foreign investors. So far this year, foreign portfolio investors have withdrawn nearly $24 billion, equivalent to around ₹2 lakh crore, from Indian equities.
Several factors have weakened investor sentiment toward India:
- Expensive stock valuations
- Weakening rupee against the dollar
- Rising energy costs and inflation worries
- Slower corporate earnings growth
At the same time, markets like Taiwan and South Korea have attracted global funds because they are directly connected to AI hardware production and electronics manufacturing.
India also lacks major companies involved in global AI infrastructure and semiconductor supply chains, making it less attractive during the current AI-driven investment cycle.
India remains economic heavyweight globally
Despite losing ground in stock market valuation, India continues to hold a massive lead over Taiwan in terms of economic size. According to International Monetary Fund estimates, India’s economy stands at around $4.15 trillion, while Taiwan’s GDP is only about $977 billion.
Economists say stock market value and economic size are very different indicators. Market capitalisation reflects investor confidence and share prices, while GDP measures the overall size of a country’s economy.
What market capitalisation means:
- Total value of listed company shares
- Reflects investor confidence in markets
- Rises when stock prices gain strength
India also remains among the world’s fastest-growing major economies, supported by strong domestic demand, infrastructure spending and a large consumer base. Analysts believe India’s long-term growth story remains intact even as Taiwan enjoys a temporary AI-driven market advantage.
