India is increasingly finding favour among global investors as capital begins to pivot away from traditional markets like the United States. According to Sunil Singhania, founder of Abakkus Asset Manager, the shifting dynamics of global liquidity, combined with India’s improving macro fundamentals, could usher in a wave of foreign investments over the next few years.
In his view, the strength of the US dollar and rising bond yields had, until recently, diverted global capital toward the US. However, that trend is beginning to reverse. Those who invested in the US are now losing across the board—on bond prices, equity markets, and the currency, he pointed out. With the US 10-year yields climbing and the dollar weakening significantly from its peak, the momentum is turning.
“Global flow is $20 trillion worth of equity owned by global funds and $40 trillion by US funds and US investors,” Singhania told NDTV Profit. “If totally 5% were to move out of the US, because there it’s clear we can move anywhere, it’s $3 trillion. And now, even if 5% of that comes to India, it’s $150 billion.” That figure is several times higher than India’s annual average foreign institutional investment.
India is well-positioned to absorb this capital due to its relative macroeconomic stability and its status as one of the few investable growth markets, he added. “Unlike many emerging markets, India has low inflation, falling interest rates, and strong government finances. Our corporate and banking balance sheets are among the cleanest in recent memory.”
While India has not been a major beneficiary of export-led growth like some Asian peers, it is becoming an attractive destination for capital seeking stable, consumption-driven economies. Import substitution in sectors like electronics, mobile manufacturing, and the recent momentum around semiconductors further enhances the country’s investment appeal.
Still, challenges remain—particularly around corporate earnings growth, which has been muted in recent quarters. But the worst may be behind, according to Singhania. “We’ve already seen a year-long market correction. Even a modest revival in earnings could trigger strong inflows.”
With global capital looking to diversify and India offering a combination of scale, stability, and reform momentum, the stage may be set for a re-rating of Indian equities. For investors seeking long-term opportunities in a structurally growing economy, India’s moment could be fast approaching.
. Read more on Markets by NDTV Profit.India is well-positioned to absorb inflow of capital due to its relative macroeconomic stability and its status as one of the few investable growth markets, Singhania told NDTV Profit. Read MoreMarkets, Business, Notifications
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