For decades, China has been the world’s most notable growth story. That narrative is quickly changing as Wall Street investors shift their focus to India. In the last three months of 2023, U.S.-based Indian ETFs received record inflows, resulting in India briefly overtaking Hong Kong to become the world’s fourth largest stock market. Morgan Stanley (MS) predicts India’s stock market will further grow to be the world’s third largest by 2030. And the investment bank recently raised the weight of Indian equities in its Morgan Stanley Capital International (MSCI) benchmark, a common measure for global stock funds, to an all-time high of 18 percent.

The optimism, however, may not be a reflection of India itself. Viral Acharya, the former deputy governor of the Reserve Bank of India and currently an economics professor at the New York University, told Observer that much of this movement is driven by a “rotation away from........

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