Daily Voice: Christmas gift for markets? India-US Deal to revive global confidence in India, says this fund manager

Anirudh Garg is the Partner and Fund Manager at INVasset PMS

The India-US trade deal before Christmas will help restore global confidence in India’s long-term growth story, Anirudh Garg, Partner and Fund Manager at INVasset PMS said in an interview to Moneycontrol.

With inflation under control, corporate earnings showing steady momentum, and the rupee maintaining relative stability, India could emerge as one of the preferred destinations for institutional capital in Asia, supporting market strength through the final quarter of the year, he believes.

According to Anirudh, despite rally in gold prices, there is no compelling reason for long-term investors to exit gold. "The metal’s inherent stability and historical performance during periods of economic stress make it a reliable hedge," he said. Here are edited excerpts:

The market has reacted positively to hopes of an India–US trade deal being finalized sooner rather than later. Do you see any concrete reason for optimism from the upcoming Asian Summit scheduled for this week, which both President Trump and Prime Minister Modi are expected to attend?

The market’s optimism ahead of the Asian Summit appears well-founded, given the steady progress in India–US trade discussions. Commerce Minister Piyush Goyal recently indicated that talks are in an advanced stage, with both nations working toward a fair and equitable framework to enhance bilateral trade. Reports suggest that tariffs on Indian exports to the US could be reduced by around 15–16 percent, which would benefit sectors such as pharmaceuticals, textiles, and engineering goods.

While Prime Minister Modi is expected to attend the summit virtually rather than in person, the event still provides a valuable platform for signaling progress and reinforcing commitments. Any constructive statements or forward-looking updates emerging from the summit could strengthen investor confidence and sustain the current market optimism, supporting equities in the near term.

If optimism persists, do you expect the market to remain in uncharted territory at least until a trade deal is officially announced?

If optimism surrounding the India–US trade deal continues, the market could maintain its upward trajectory and remain in uncharted territory for some time. The Nifty 50 is already hovering near record highs, supported by strong domestic liquidity and expectations of a breakthrough in trade negotiations. Investors seem to be factoring in the possibility of tariff reductions of around 15–16 percent on Indian exports to the US.

However, while sentiment remains buoyant, sustained momentum will depend on concrete developments and clear timelines for implementation. If the upcoming Asian Summit delivers even a partial agreement or a credible roadmap, the market may continue its rally, supported by steady foreign inflows and resilient corporate earnings.

Do you anticipate foreign institutional investors (FIIs) to return strongly if the deal is signed within this month or before Christmas?

If the India–US trade deal is signed within the next few weeks, a meaningful return of foreign institutional investors (FIIs) looks likely. Recent market data indicates that FII outflows have slowed considerably, suggesting a shift in sentiment as India’s economic resilience and policy stability continue to stand out among emerging markets. A finalized trade agreement could further strengthen India’s position by easing tariff barriers and improving export competitiveness, prompting renewed foreign inflows.

Beyond the immediate reaction, a deal before Christmas will help restore global confidence in India’s long-term growth story. With inflation under control, corporate earnings showing steady momentum, and the rupee maintaining relative stability, India could emerge as one of the preferred destinations for institutional capital in Asia, supporting market strength through the final quarter of the year.

Do you believe the bull run is likely to continue in the quick-commerce space?

The quick-commerce sector in India is experiencing robust growth, driven by increasing consumer demand for rapid delivery services. The market is projected to reach approximately $6-6.5 billion in revenue by 2025, with a compound annual growth rate (CAGR) of 25-30 percent through 2030. This expansion is fueled by the proliferation of smartphones, greater internet penetration, and a shift in consumer behaviour favouring convenience.

Leading players such as Blinkit, Swiggy Instamart, Zepto, and JioMart are capitalising on this trend, enhancing their service offerings and expanding their reach. For instance, Blinkit plans to increase its dark store count to 3,000 by March 2027, while JioMart reported a 200 percent year-on-year growth in its quick hyper-local delivery segment. Additionally, Zepto has secured $450 million in funding, elevating its valuation to $7 billion. These developments underscore the sector's potential and the strategic investments being made to meet the evolving demands of Indian consumers.

Do you see strong value and growth potential in new-age stocks going forward?

The outlook for new-age stocks in India remains positive, driven by robust consumer demand and growing digital adoption. At the same time, investors are advised to remain selective, as not all new-age companies have sustained their post-IPO momentum. While many show impressive growth potential, careful evaluation of fundamentals, revenue visibility, and market positioning is essential. The sector is likely to continue attracting capital, but performance will vary across companies, with those demonstrating clear strategies and operational efficiency expected to lead the next phase of growth.

For long-term investors in gold, do you think there is still no reason to exit, even though it has shown a stellar run over the past few quarters?

Gold continues to remain a preferred asset for long-term investors, even after a strong rally over the past few quarters. The surge in prices has been supported by global economic uncertainty, a weakening US dollar, and consistent demand from central banks and retail investors seeking a safe-haven asset.

In India, gold’s appeal is further reinforced by its role as a store of value and portfolio diversifier, providing protection against market volatility and currency fluctuations.

Despite recent gains, there is no compelling reason for long-term investors to exit. The metal’s inherent stability and historical performance during periods of economic stress make it a reliable hedge. With ongoing geopolitical tensions and inflationary pressures, gold is likely to continue offering both security and potential appreciation, making it a prudent component of a diversified investment portfolio.

Do you expect more merger or acquisition deals—like the one involving RBL Bank—to emerge in the financial sector?

The recent acquisition of a 60 percent stake in RBL Bank by Dubai-based Emirates NBD highlights the growing trend of mergers and acquisitions in India’s financial sector. Valued at $3 billion, this deal is among the largest foreign investments in the Indian banking industry and signals strong international confidence in the market. The Reserve Bank of India’s evolving stance on allowing foreign regulated institutions to invest in domestic banks has created a favorable environment for such strategic transactions.

This acquisition is expected to strengthen RBL Bank’s balance sheet, expand its lending capacity, and support growth in areas like wealth management. The deal also underscores a broader consolidation trend, with M&A activity in the financial sector rising significantly over the past year. With foreign capital entering mid-sized banks, similar transactions are likely to continue, enhancing competitiveness and encouraging further sectoral evolution.