Key Details
Capital markets are becoming increasingly important for financing investment, innovation, infrastructure, and economic transformation. While India has emerged as one of Asia’s most active capital markets, the report identifies corporate debt markets, workforce development, and governance as important priorities for sustaining long-term competitiveness.
India Snapshot | OECD Finding |
|---|---|
Public Equity Markets | Among Asia’s largest by market capitalisation and number of listed firms |
Corporate Bond Market | Non-financial corporate bonds equal only 3.4% of GDP |
Corporate Investment | 34% of listed firms recorded investment declines exceeding 10% in 2025 |
Human Capital | Top-performing South Asian firms provide 51 hours of annual training per employee versus 18.9 hours among weaker firms |
Employee Turnover | Falls from 26% in lower-performing firms to 16.2% in top-performing firms |
Female Workforce Participation | 13% by company count and 17% by market capitalisation |
Governance Strength | BRSR and India’s proxy-advisory framework highlighted by the OECD |
Technology Investment | India is Asia’s second-largest recipient of AI-related venture capital investment |
Summary
Capital Markets Are Becoming More Important to Economic Growth
The OECD Asia Capital Markets Report 2026 argues that capital markets are no longer simply financial intermediaries. They are increasingly becoming the mechanisms through which economies finance infrastructure, innovation, business expansion, SMEs, and the green transition. As growth slows and financing needs increase, economies that rely primarily on bank lending may face constraints in mobilising long-term capital.
Asian capital markets raised USD 3.3 trillion in 2025, accounting for 39% of global capital raised, underlining the region’s growing importance in global finance.
India’s Next Challenge Is Market Depth, Not Market Size
The report highlights India’s position as one of Asia’s leading capital markets, supported by a large public equity ecosystem, strong retail participation, and active capital raising.
However, the OECD notes that India’s non-financial corporate bond market remains relatively shallow at just 3.4% of GDP, significantly below several regional peers. This limits the availability of market-based financing for businesses and infrastructure projects and leaves firms more dependent on traditional bank lending.
The report suggests that strengthening corporate debt markets will be important if India is to finance future investment requirements at scale.
Governance and Capital Allocation Remain Critical
Across Asia, the OECD identifies persistent challenges relating to capital efficiency, ownership concentration, and investor stewardship. Nearly 40% of listed Asian companies trade below book value, indicating concerns about governance quality and capital allocation.
The report highlights India’s distinctive stewardship framework, where proxy advisory firms provide voting recommendations while institutional investors retain voting responsibility. It also notes the growing importance of disclosure frameworks such as Business Responsibility and Sustainability Reporting (BRSR) in improving transparency and investor confidence.
Human Capital Is Emerging as a Capital-Market Issue
One of the report’s most significant findings is the strong relationship between workforce practices and corporate performance.
The OECD finds that top-performing South Asian firms provide nearly three times more employee training than weaker-performing firms, while also experiencing substantially lower workforce turnover. Since Indian companies account for a large share of the South Asian sample, these findings have direct relevance for India’s corporate sector.
The report also highlights persistent workforce challenges, including low female participation rates and relatively limited collective bargaining coverage.
Technology, Sustainable Finance, and New Sources of Capital Are Reshaping Markets
The report identifies AI-related investment, sustainable finance, private credit, and digital-market infrastructureas emerging drivers of capital-market development.
India is now the second-largest recipient of AI-related venture capital investment in Asia, reflecting growing investor interest in technology-intensive sectors. At the same time, the OECD argues that regulators will need to balance innovation with market resilience, investor protection, and financial stability.
What Is Stewardship in Capital Markets?
Stewardship refers to the responsibility of institutional investors—such as mutual funds, pension funds, insurers, and asset managers—to actively monitor investee companies, engage with management, vote on important corporate decisions, and promote long-term value creation on behalf of beneficiaries. Strong stewardship frameworks help improve corporate governance, accountability, and investor confidence.
Policy Relevance
Deepening corporate bond markets can reduce excessive reliance on bank lending and broaden financing options for infrastructure and business investment.
Strengthening corporate governance and stewardship practices can improve investor confidence and help address valuation discounts.
Expanding investment in workforce development can support productivity growth, innovation, and long-term corporate performance.
Increasing female workforce participation remains an important opportunity for improving labour-market outcomes and economic competitiveness.
Enhancing disclosure frameworks such as BRSR can improve transparency around workforce quality, sustainability, and long-term corporate resilience.
Mobilising capital for innovation, AI, and sustainable finance will be increasingly important as India pursues technology-led growth and climate-transition goals.
Follow the Full Report Here: OECD — Asia Capital Markets Report 2026