$25 billion FII comeback? HSBC explains why foreign money may return to India

India may be one portfolio rebalance away from attracting about $25 billion in foreign equity inflows, as global fund managers seek shelter from volatility in AI-heavy Asian markets, according to HSBC. More than 80% of active global emerging-market funds are underweight India. If those funds simply restore their allocations to neutral, the shift could generate around $25 billion of inflows, HSBC strategists Prerna Garg, Herald van der Linde and Yogesh Aggarwal said in a report. “FII outflows linked to AI rotation have largely played out,” the strategists said. A return to neutral by underweight funds alone “could drive around USD25bn…