From the Opinions Editor: It's not tariffs, AI play, or energy imports that keep investors away. India lacks a growth story |
A country’s stock market serves as a useful barometer of its attractiveness as an investment destination. Investors, both domestic and foreign, are, after all, driven by the ruthless logic of risks and returns, and not by political rhetoric. Flows of capital are thus a good reflection of what investors believe are a country’s growth prospects. And if the recent past is any guide, India has fallen well off the radar of foreign investors. But, it’s not just the war in West Asia that has made investors skittish. The uneasiness about India’s growth story predates that.
One could well argue that in this Trumpian era of uncertainty, global capital has become risk-averse. And that emerging markets are disproportionately impacted by the flight to safety. But stock markets tell a different story. Investors are exuberant about the prospects of both emerging and developed markets, countries that were hit by high US tariffs, those without an AI play and even those that are dependent on energy imports from West Asia.
Take a look at the US. Largely insulated from the dislocations in the energy markets, it is at the heart of the AI ecosystem. Its top 5 companies — NVIDIA, Alphabet (Google), Apple, Microsoft and Amazon — have a combined market........