Vietnam Overtakes India With 71.8 Points in September 2026 Emerging Markets Ranking

Vietnam overtook India to secure the top position in the September 2026 Emerging Markets Tracker, which evaluates 12 major developing economies across seven economic indicators. Vietnam scored 71.8 points, while India ranked second with 65.1 points, followed by China at 63.5 points. Malaysia and Indonesia secured the fourth and fifth positions with scores of 60.3 and 55.7, respectively.

The rankings marked a reversal from August, when India topped the tracker on the back of strong economic growth and manufacturing activity. The composite score considers GDP growth, manufacturing activity, exports, inflation, import cover, currency movements and changes in stock market capitalisation.

Among the leading economies, Vietnam recorded GDP growth of 10 per cent and a manufacturing PMI of 51.9. India reported GDP growth of 7.8 per cent and a manufacturing PMI of 55.1. China posted growth of 4.5 per cent with a PMI of 50.1, while Malaysia and Indonesia recorded GDP growth of 5.3 per cent each, with manufacturing PMI readings of 49.9 and 52.4, respectively.

India's relatively weaker performance across external economic indicators affected its overall ranking despite strong domestic fundamentals. The country recorded export growth of 23 per cent, significantly below Vietnam's 39.5 per cent and China's 36.2 per cent. Inflation was another area of concern, with India's consumer price inflation at 5.5 per cent, compared with 5.1 per cent in Vietnam and 0.9 per cent in China.

Financial market performance also contributed to the difference. India's stock market capitalisation declined 2.2 per cent in September, whereas Vietnam recorded an increase of 2.7 per cent. These factors collectively weighed on India's composite score despite its stronger manufacturing PMI and domestic economic activity.

Vietnam's rise to the top was supported by robust economic growth, export performance and currency appreciation. Its real GDP expanded 10 per cent year-on-year, the highest among the 12 economies tracked. Manufacturing activity remained in expansionary territory, with the PMI at 51.9, while exports grew 39.5 per cent. Vietnam's currency also appreciated 0.6 per cent against the U.S. dollar on a monthly basis.

However, India retained an advantage in foreign exchange reserves. Its import cover stood at 10.6 months, significantly higher than Vietnam's 1.9 months. This indicates that India has a considerably larger foreign exchange cushion to finance imports, even though Vietnam performed better in the overall ranking.

The decline in India's ranking comes despite continued strength in domestic economic activity. The manufacturing PMI increased to 55.1 in September from 52.8 in August, supported by stronger domestic demand and new orders. India's core infrastructure output also grew 7.9 per cent year-on-year in September, while the government estimated Q2FY27 GDP growth at around 7.3 per cent.

However, elevated crude oil prices, foreign capital outflows and exchange rate volatility continue to pose challenges. Sustained foreign capital outflows could weigh on valuations and liquidity in Indian equity markets despite healthy domestic economic activity.

India's second-place position does not indicate an economic contraction. Instead, it highlights how differences in export growth, inflation, currency movements and financial market performance can influence the relative standing of emerging economies. Going forward, export performance, foreign capital flows, inflation and currency stability will remain important factors in determining whether India can reclaim the top position in the Emerging Markets Tracker.

Disclaimer: The article is for informational purposes only and not investment advice.