Despite recent market fluctuations, wealth managers recommend that NRIs maintain their investments in India, highlighting the country's long-term growth potential.
New Delhi, India Jul 4, 2026 ALN: For many Non-Resident Indians (NRIs), recent market volatility has raised an important question: Should they continue allocating capital to India when global , particularly those in the United States, have delivered stronger returns over the past couple of years? This inquiry is particularly pertinent given the fluctuating nature of global financial , where sentiment can shift rapidly based on macro indicators, geopolitical tensions, and other factors influencing investor behavior.
The debate has gained traction amid the AI-driven rally in US equities, which has drawn significant attention and investment. This surge in technology stocks, particularly those associated with artificial intelligence, has created a perception that the US market is the place to be for investors seeking high returns. Additionally, a weaker rupee against the dollar has raised concerns for dollar-based investors, many of whom assume that rupee depreciation significantly erodes returns on their investments in India. This concern is compounded by a temporary slowdown in corporate earnings, which has led to a cautious approach among some investors.
However, wealth managers argue that these concerns stem largely from short-term market cycles rather than a deterioration in India's long-term fundamentals. Historically, the rupee has depreciated at a much slower pace than commonly perceived, allowing strong rupee-denominated returns to translate into healthy dollar returns over longer investment horizons. More importantly, they say, India's structural growth drivers remain intact despite periodic corrections. The Indian economy has shown resilience in the face of global challenges, and its growth story is supported by a multitude of factors that continue to position it favorably on the world stage.
According to Feroze Azeez, Joint CEO at Anand Rathi Wealth, India's biggest strength lies in where it stands in its journey. Unlike several developed economies that are entering a phase of slower structural growth, India continues to benefit from favorable demographics, rising domestic consumption, manufacturing expansion, and policy reforms. With nominal GDP expected to grow in double digits over the long term, the country offers a supportive backdrop for sustained corporate earnings growth. This growth is not merely a short-term phenomenon but rather a reflection of deeper trends that suggest a robust future.
Azeez added that macro stability, supported by moderate inflation, prudent fiscal management, and healthy foreign exchange reserves, provides greater visibility on earnings and valuations. This stability is critical for investors as it reduces uncertainty and enhances the predictability of returns. "The investment case for India is based on long-term structural growth and compounding, rather than short-term market movements," he said, emphasizing the importance of maintaining a long-term perspective when evaluating investment opportunities in India.
Another key change over the past decade has been the growing influence of domestic investors. Domestic institutional ownership has now overtaken foreign portfolio ownership for the first time in modern market history. This shift has been aided by record Systematic Investment Plan (SIP) inflows that continue to provide a steady source of long-term capital. As more Indian households invest in equities and mutual funds, the market is becoming less vulnerable to swings in global risk appetite. This trend signifies a maturation of the Indian market, where local investors play a crucial role in stabilizing it during periods of volatility.
Shiv Gupta, Founder and CEO of Sanctum Wealth, believes this transition is one of the most underappreciated developments in Indian finance. According to him, India's growth is increasingly being funded by its own households through rising savings, domestic consumption, and expanding capital . "A market supported by its own savers is more resilient than one dependent on foreign flows," he said, noting that this explains why Indian tend to recover faster from bouts of global volatility. The increasing participation of domestic investors not only provides a buffer against external shocks but also reflects a growing confidence in the Indian economy.
While earnings growth has moderated in the recent past, analysts expect corporate profitability to improve over the next two financial years. This anticipated recovery is crucial for maintaining investor confidence and attracting further capital into the market. Combined with improving balance sheets and easing valuations, many wealth advisors believe the current environment offers an attractive entry point for patient investors. This perspective is grounded in the understanding that market corrections are often followed by recoveries, and those who remain invested during downturns can benefit from subsequent upswings.
Tarun Birani, Founder and CEO of TBNG Capital Advisors, emphasizes that India's appeal lies in its ability to deliver earnings compounding over long periods rather than quarter-to-quarter performance. He notes that banks are well-capitalized, corporate balance sheets are among the strongest seen in over a decade, and government-led capital expenditure continues to support activity. At the same time, valuations have moderated, even as corporate return on equity has room to improve, creating favorable conditions for long-term investors. This environment encourages a focus on fundamentals rather than short-term price movements, aligning with the investment philosophy of many wealth managers.
Birani also highlights the rapid rise in household participation in equities and mutual funds over the past decade, describing it as a structural "domestic capital flywheel" that helps cushion market corrections. This increase in participation not only reflects a growing awareness of investment opportunities among the Indian populace but also signifies a shift towards a more financially literate society that is willing to engage with the capital .
For wealth managers, the message is clear: while short-term performance may influence sentiment, India's investment case continues to rest on structural growth, improving corporate fundamentals, and the increasing resilience of its domestic capital—factors that are likely to play out over years rather than quarters. This long-term perspective is essential for NRIs who are contemplating their investment strategies in India, especially in light of the current market volatility.
NRIs are encouraged to consider their investment horizons and risk tolerance when making decisions. Staying invested in India may not only align with their long-term financial goals but also allow them to participate in the growth story of one of the world's fastest-growing economies. Moreover, as the Indian market continues to evolve, those who position themselves strategically may find opportunities that yield significant returns over time.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the publisher.)
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