Foreign investors have withdrawn ~$26 billion from Indian equities in 2026, the highest on record, as large-cap indices like Nifty 50 underperform (-10% YTD) despite India's robust 7.8% Q2 GDP growth. Brokers warn that India's largest companies are investing in legacy businesses rather than high-growth sectors like EVs and semiconductors, while innovative mid-caps and small-caps—where real growth momentum lies—lack sufficient liquidity and analyst coverage to attract institutional capital. Unless India's corporate titans pivot toward AI and emerging technologies, foreign capital repatriation is unlikely even if global conditions improve.