 "Investors bet India will win Trump’s trade war as global funds pour in")
Global investors are once again pouring capital into India, fueling billion-dollar corporate deals and pushing stock prices to their highest levels in nearly seven months.
According to a Bloomberg report, the renewed enthusiasm reflects growing bets that Asia’s third-largest economy could benefit from President Donald Trump’s trade war.
The NSE Nifty 50 Index climbed to its highest point since October this week, boosted by optimism that India may be among the first to secure a trade agreement with the US after positive remarks from Trump.
Corporate India is capitalising on the momentum.
Shapoorji Pallonji Group secured a $3.4 billion private credit deal, and Reliance Industries Ltd. locked in a $2.98 billion-equivalent loan, underscoring the rising appeal of the nation’s corporate debt to global investors, reported Bloomberg.
Driving this investor optimism is a blend of supportive macroeconomic factors. In New Delhi, policymakers are seizing what they view as a once-in-a-generation opportunity to embed India more deeply into global supply chains.
At the same time, the Reserve Bank of India’s dovish stance is fueling market confidence, with bond yields falling to their lowest levels in over three years.
“India can be a big winner of Trump 2.0 if it plays its cards right,” Bloomberg quoted Trinh Nguyen, senior economist at Natixis in Hong Kong, as saying.
Impact Shorts
More Shorts“India does offer both high yield in bonds and decent return on capital for equity investors,” Nguyen added.
Global fund managers, including Franklin Templeton and Federated Hermes, have quickly turned bullish on India.
According to Bloomberg, citing a recent BofA Securities survey, Indian equities are now the top pick among Asia-focused investors.
After offloading over $25 billion in Indian stocks between October and February, foreign investors have poured in more than $2.5 billion this quarter — despite trade tensions and India-Pakistan clashes. The Nifty, which hit a multi-month low on April 7, is now just 5% below its September record.
India’s appeal lies in its relatively insulated economy and lower US tariffs compared to China, making it a strategic alternative for global firms like Apple amid trade uncertainty.
“Amid global trade uncertainties, India’s large domestic market, ascending middle class, and prospects of a trade deal with the US will help spur global investors’ interest in Indian credit,” Wei Liang Chang, macro strategist at DBS Group Holdings Ltd, told Bloomberg.
Of course, risks remain. The recent spike in tensions with Pakistan underscored the geopolitical uncertainties that could disrupt Prime Minister Narendra Modi’s infrastructure push, which is fueling demand for foreign capital in sectors from solar power to highways.
Even so, investors are staying focused on India’s strengthening economic outlook—for now.
“The key assumption is for some agreement on a trade deal between the US and India, coupled with good external and internal macro stability,” Bloomberg quoted Michael Wan, a senior currency analyst at MUFG Bank, as writing in a note.
With inputs from agencies
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