Foreign fund flows into India have reduced significantly as the country witnessed inflows of just $40 million in the last three months, the weakest among its emerging market peers, says a report.

According to Kotak Institutional Equities' foreign fund flow tracker, "Flows to India continue to disappoint as China, Korea and Taiwan attract the largest inflows in the last three months."

At a time when Indian inflows totalled at $40 million, China had witnessed as much as $1.3 billion, Brazil $484 million and Russia $365 million.

India witnessed an outflow of $371 million last month, while China saw an inflow of $45 million during the period under consideration.

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The report further noted that one of the factors behind the declining trend in Indian allocations was reduction in exposure by BRIC funds in the month of May.

BRIC funds reduced their Indian exposure from 14.6 per cent to 12.9 per cent in May.

The report said that China and Brazil are gaining at the expense of India.

Last month when BRIC funds reduced India exposure by 1.7 per cent, they had increased their China exposure by 2 per cent and Brazil exposure by 1.3 per cent.

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Meanwhile, the ten-largest India-dedicated funds have witnessed a cumulative outflow of $285 million in the last four weeks.

Their AUMS have fallen by around 14 per cent in the last three months, the report said, adding that "considering their changes in NAV, they have underperformed the broader market."

There are 1,288 emerging market dedicated funds, which are managing $708 billion of cumulative net assets. Asia (ex-Japan) has 574 such funds managing $238 billion AUM, Global Emerging Market dedicated funds total to 335 (managing $363 billion AUM) and India-dedicated 67 with a cumulative net assets of $27 billion.