In the wake of volatile geopolitics and uncertain trade realignments, India is steadily carving a strong, resilient position for itself in the global investment ecosystem. A recent Bank of America Securities survey has placed India ahead of regional giants like Japan and China in the eyes of wealth fund managers. About 42% of respondents now hold an overweight position in Indian equities, compared to 39% for Japan and a mere 6% for China.
This surge in confidence is not accidental. It reflects India’s growing credibility as a stable, consumption-driven economy with a robust reform trajectory and strategic positioning in the global supply chain reset that has unfolded since the US-China trade war began in 2017. While the US and China have since reached a temporary truce, investors appear to be betting on longer-term structural shifts rather than short-term diplomatic detours.
Supply Chain Shifts and the “China Plus One” Advantage
One of India’s most significant tailwinds is the strategic global pivot toward “China Plus One”—a diversification strategy employed by multinational corporations looking to de-risk their manufacturing dependence on China. Apple’s decision to shift a major portion of its US-bound iPhone production to India, along with Foxconn’s recent US$1.5 billion investment in its India operations, underscores this trend.
Raghuram Rajan, former RBI Governor, aptly captured the sentiment, saying, “This could be India’s moment.” In his view, India must embrace this opportunity with proactive reforms, a predictable policy regime, and a welcoming investment climate, rather than relying heavily on subsidies or protectionist instincts.
While China may recapture some investor interest in the short term, experts believe India’s advantages—particularly its large domestic market, improving infrastructure, and democratic institutions—could offer more durable gains. The key, however, will be execution. High logistics costs, regulatory friction, and policy unpredictability remain areas for urgent attention.
Geopolitical Tensions and Resilience in the Market
India’s upward market momentum has also proven resilient to regional geopolitical stress. Despite a military clash with Pakistan earlier this year, the benchmark Nifty 50 index quickly rebounded after a ceasefire was reached in early May. This suggests that investors are increasingly confident in India’s capacity to manage its geopolitical challenges without destabilising its economic trajectory.
Meanwhile, India continues to strengthen its trade diplomacy, having recently signed a long-awaited agreement with the UK aimed at boosting two-way trade by US$34 billion by 2040. The US-India trade dialogue is also ongoing, with Commerce Minister Piyush Goyal in Washington negotiating tariff reductions that could signal further market liberalisation.
These moves are strategic and necessary. They not only mitigate regional risks but also position India as a reliable, rules-based partner for countries looking to recalibrate their trade networks amid global uncertainty.
A Broader Vision for India’s Global Economic Role
The moment is ripe for India to step decisively into its role as a key player in global trade and capital flows. But capital alone is not the goal—credibility, trust, and long-term value creation are. Rajan’s reminder that “India needs to be a lot more proactive than reactive” is timely and important.
While India cannot out-subsidise China, it can certainly out-execute many others. A focus on institutional stability, judicial clarity, labour reform, and efficient logistics can dramatically elevate its investment appeal.
The opportunity is immense. According to the Bank of America report, Indian infrastructure and consumption are major drivers of capital inflow decisions. Add to that a young, skilled workforce and a growing digital ecosystem, and India stands as a compelling alternative to traditional manufacturing hubs.
This isn’t just about stock market sentiment. It’s about India claiming its place in the 21st-century economic order. For a world eager for stability, sustainability, and scale, India’s moment may have finally arrived—but only if it stays focused and bold.
