Market experts back 'India growth story' amid growing Trump-driven global uncertainty

panelists acknowledged that forecasting markets in a Trump-led global environment is increasingly difficult.

• Market experts remain bullish on India despite rising global geopolitical risks
• India's macro story seen as strong, with growth pillars and capex in place
• Valuations pose challenges, but long-term returns and sentiment remain positive

Did our AI summary help?

Market veterans remain bullish on India even as geopolitical risks rise under US President Donald Trump, arguing that India’s structural growth story remains intact despite near-term volatility. They were speaking at the CFA Society India Investment Conference held in Mumbai on January 9.

“I think 2026 will be better than 2025,” said Carenlian Asset Managers' Vikas Khemani, calling the past year a familiar phase of consolidation rather than a breakdown in fundamentals. He noted that every couple of years you have a similar year. Drawing parallels with the Ukraine war-driven uncertainty of that period, Khemani said pessimism tends to peak just before conditions stabilize. “The environment was very uncertain then as well—geopolitics, oil prices, inflation. But towards September-October, things started settling down.”

He said India’s macro story has strengthened even amid global disruption. “In the last 12 months, while all these things were happening, we had a great fiscal stimulus, a great monetary stimulus, liquidity infusion, interest-rate actions and growth-boosting policies,” he said. “Government capex is doing well. Private capex has picked up," he said adding that he remained optimistic about India’s whole story.  “All our pillars of growth are in place," he said.

Still, panelists acknowledged that forecasting markets in a Trump-led global environment is increasingly difficult.

HDFC AMC's Chirag Setalvad noted that while long-term returns remain strong, valuations continue to pose a challenge. “The last five years’ returns are still in their 20s. The last 10 years for mid-caps is 16–17%,” he said, adding that Indian markets have had a "fantastic run. We’ve just had a one-year or one-and-a-half-year consolidation.”

“Valuations are still at a premium. Mid-caps are 15–20% premium. Small caps are 14–15%. You need corrections to normalise," he said.

That said, he noted a shift in sentiment that could prove constructive. “Retail sentiment has changed dramatically. IPOs have slowed down. Valuations are becoming more sensitive. We’ve gone from being extremely nervous to a little bit nervous," he said.

On global growth, Setalvad is a bit cautious. “The U.S. is unlikely to sustain 2.5–2.7% growth. China has structural issues. Europe is in the doldrums... It’s not a fantastic global environment," he said.

WhiteOak Capital's Prashant Khemka added that expectations for Indian equities remain stable despite the noise. “At the start of any year, the equivalent of a fair coin flip in Indian equities is 10–12% returns,” he said. “That expectation is no different for 2026," he said.

He dismissed fears that India is meaningfully overvalued. “India has always traded at a higher multiple, and it deserves a higher multiple. It’s a democracy. Property rights are stronger. You can’t just say India is expensive because it trades at 20 times," he noted.

Comparing India with the US, Khemka said, “India today is trading at a higher discount to the US than it has over the last 25 years, barring global crises.”

On Trump’s broader impact, Khemka said the shift is ideological rather than temporary. “A Trump-like ideology has now firmly taken root. The probability of a Trump-like president in the future is much higher today than it was pre-Trump," he said.

Setalvad added that volatility should be welcomed, not feared. “We want markets to be volatile. We want corrections. That’s how wealth is created," he added.