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India is witnessing a sharp resurgence in foreign investment, leading a broader but uneven recovery across emerging markets (EMs) as fears over trade tariffs begin to subside, according to the latest Elara Capital Global Liquidity tracker.

In the three weeks since signs of a global liquidity reversal first emerged, India has seen $960 million in foreign capital return. This is around 12% of the $7.7 billion that exited the market following Donald Trump’s victory in the U.S. presidential election last November. This, according to the report marks the strongest recovery among EMs, outpacing Brazil, Hong Kong, and Taiwan.

The report noted that in the previous week, India logged its highest weekly inflow since July 2024 at $724 million. A significant chunk of that, $487 million, flowed into India-dedicated funds, which was the most in seven months. The inflows were concentrated in long-only large-cap funds, according to the report.

Over the past six weeks, India-dedicated funds have attracted $1 billion in total, split between $575 million in ETFs and $440 million in long-only large-cap strategies. Luxembourg-based funds accounted for 40% of these flows, with Ireland and U.S.-domiciled funds contributing 35% and 20%, respectively.

A similar trend emerged in Taiwan mirrored India’s trend, recovering 10% of its earlier outflows. However, South Korea continues to lag behind, with no clear signs of rebound.

Despite renewed interest in EMs, US-focused funds have not seen a corresponding decline. Foreign inflows into the US remain strong, averaging $6 billion per week. However, domestic US mutual funds have been under redemption pressure for the past six weeks.

The report adds that high-yield or “junk” bond funds posted $3.6 billion in inflows during the week, reversing five consecutive weeks of redemptions totalling $31 billion. Gold funds, on the other hand, saw $2.6 billion in outflows which is the first in over four months, following 15 straight weeks of inflows worth $34 billion.

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