South-east Asian nations are swallowing an outflow of money from India, as foreign investors lose patience with its policy paralysis and slowing growth, and aim instead for more-promising emerging markets such as Indonesia.
Corruption scandals and high inflation have added to the woes of India, which has seen growth slow to a three-year low while the fiscal deficit widened to 5.9 per cent of gross domestic product in the last financial year.
"India was sold on the promise of high growth, which simply hasn't panned out over the past four years," said Mr Gautam Prakash, founder of United States-based hedge fund Monsoon Capital.
Foreign investors pulled a net US$540 million (S$678.5 million) out from India in March and April, compared with US$13 billion in inflows from January to February.
Foreign portfolio flows into Indian stocks have dropped 99 per cent to just 5.17 billion rupees (S$120.8 million) since a March budget that largely disappointed investors, compared with 427.4 billion rupees this year before the budget.
Among the most significant developments from the shift has been the direction in which money is headed - with a big chunk flowing to Jakarta and other South-east Asian capitals.
Two provisions put forward in the budget to tax indirect investments and combat tax evasion were the last straw for some global mutual funds, prompting an acceleration of money leaving India.
While the provisions were later put on ice, the fact that such a tax could be proposed in India was enough for some investors to send their Asia-allocated money further east.
"You're seeing a situation where the 'I' in Bric is being replaced by Indonesia," said Mr Tim Condon, head of research and strategy for Asia at ING.
An emerging-market brochure distributed by Franklin Templeton last month had data on India missing from a world map.
From a global leader in emerging-market investing, led by omnipresent guru Mark Mobius, that omission was telling.