US rally vs India story? Wealth managers explain why NRIs should stay the course for next 10 years

For many Non-Resident Indians (NRIs), recent market volatility has raised an important question: Should they continue allocating capital to India when global markets, particularly the US, have delivered stronger returns over the past couple of years?

The debate has gained traction amid the AI-driven rally in US equities, a weaker rupee against the dollar and a temporary slowdown in corporate earnings.

For dollar-based investors, currency movement is another key consideration, with many assuming that rupee depreciation significantly erodes returns.


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.

Structural growth story remains intact

According to Feroze Azeez, Joint CEO at Anand Rathi Wealth, India's biggest strength lies in where it stands in its economic journey.

Unlike several developed economies that are entering a phase of slower structural growth, India continues to benefit from favourable 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, he said.

Azeez added that macroeconomic stability, supported by moderate inflation, prudent fiscal management and healthy foreign exchange reserves, provides greater visibility on earnings and valuations. "The investment case for India is based on long-term structural growth and compounding, rather than short-term market movements," he said.

Domestic investors are becoming the market's anchor

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, aided by record SIP inflows that continue to provide a steady source of long-term capital. This has made Indian equities less vulnerable to swings in global risk appetite.

Shiv Gupta, Founder and CEO of Sanctum Wealth, believes this transition is one of the most underappreciated developments in Indian markets.

According to him, India's growth is increasingly being funded by its own households through rising savings, domestic consumption and expanding capital markets. "A market supported by its own savers is more resilient than one dependent on foreign flows," he said, noting that this explains why Indian markets now tend to recover faster from bouts of global volatility.

He also points out that the broader investment case remains anchored in long-term drivers such as rising incomes, financialisation of savings, infrastructure spending and a significantly healthier banking system than a decade ago.

Earnings, valuations support the long-term case

While earnings growth has moderated in the recent past, analysts expect corporate profitability to improve over the next two financial years. Combined with improving balance sheets and easing valuations, many wealth advisors believe the current environment offers an attractive entry point for patient investors.

Tarun Birani, Founder and CEO of TBNG Capital Advisors, says 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-capitalised, corporate balance sheets are among the strongest seen in over a decade and government-led capital expenditure continues to support economic activity. At the same time, valuations have moderated, even as corporate return on equity has room to improve, creating favourable conditions for long-term investors.

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.

For NRIs, he believes India offers a unique combination of long-term wealth creation and alignment with future financial goals in rupee terms. "You're participating in a long-run compounding story that also maps to your family, property and eventual return to India," he said.

What Should NRI Investors Do?

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 markets—factors that are likely to play out over years rather than quarters.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)