India has emerged as Asia’s most preferred equity market, surpassing Japan, according to the Bank of America (BofA) Asia Fund Manager Survey conducted from May 2 to May 8, 2025. The survey, involving 208 global fund managers overseeing $522 billion in assets, revealed that 42% of respondents allocated an overweight position to Indian equities, compared to 39% for Japan and just 6% for China. This marks a significant turnaround, as India had briefly fallen to the second-least favored market in Asia in February 2025.
The surge in investor confidence is attributed to India’s robust economic growth, projected at 7% for FY25, driven by strong domestic consumption, infrastructure development, and policy reforms. The survey highlighted India’s stable macroeconomic environment, with declining inflation and a resilient rupee, as key factors attracting investors. Additionally, the country’s burgeoning digital economy and manufacturing push under initiatives like “Make in India” have bolstered its appeal.
In contrast, Japan’s equity market has faced challenges due to a weaker yen and slower growth projections, while China’s market struggles with regulatory uncertainties and geopolitical tensions. The shift has boosted foreign institutional investments into India, with $12 billion flowing into Indian equities in 2025 so far, per BSE data. This development underscores India’s growing prominence as a global investment destination, with experts predicting sustained investor interest in sectors like technology, banking, and renewable energy.
