India Draws Steady Capital Despite Uncertainties Around Global Trade Pacts Despite the ongoing geopolitical drama, however, India's macroeconomic fundamentals remain robust, and global capital doesn't pause just because trade talks are underway - it moves where there is relative certainty, demand, and structural growth.
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India and the US have been drawing near to a limited trade deal, with ongoing discussions including tariff reductions and access to the market in certain sectors. The countries do not have a full-fledged Free Trade Agreement (FTA) on the cards, but recent comments from US Commerce Secretary and President Trump's top aide, Howard Lutnick, have sparked optimism.
"You should expect a deal between the United States and India in the not-too-distant future because I think we found a place that really works for both countries," Lutnick said in a keynote address at the eighth iteration of the US-India Strategic Partnership Forum (USISPF) last Sunday in Washington, DC.
Despite the ongoing geopolitical drama, however, India's macroeconomic fundamentals remain robust, and global capital doesn't pause just because trade talks are underway - it moves where there is relative certainty, demand, and structural growth. According to Utkarsh Sinha, managing director of Bexley Advisors, India continues to tick those boxes.
"There may be some short-term hesitation as investors wait to see the final contours of the India–US trade deal, but India remains an island of stability in a global storm, making it a compelling capital destination even amid policy flux. What could cause a more material shift is a fundamental reset in US–China relations or a major escalation in global conflicts, including India–Pakistan, as such scenarios typically freeze capital flows across emerging markets," said Sinha.
India recorded a 7.8 per cent GDP growth in FY2024–25, according to the Ministry of Finance, aided by domestic consumption and strong corporate earnings. Foreign Direct Investment (FDI) into the country stood at USD 70.9 billion in FY24, making it the fifth largest FDI recipient globally according to a UNCTAD World Investment Report.
Coming to the Indian macroeconomics, investors in India, both retail and institutional, now better understand digital businesses with metrics like customer acquisition cost (CAC), lifetime value (LTV), and retention rates are no longer being unfamiliar, according to Keyur Majmudar, Managing Partner and CIO, Bay Capital Investments Advisors.
"These are now part of regular investment evaluations. Second, regulators have adapted. SEBI's changes, including allowing high-growth, loss-making firms to list, have opened doors for more digital IPOs. The market focus is shifting from short-term profits to long-term value," said Majmudar.
India's domestic capital pool also has growth, with mutual funds, pension funds, sovereign wealth, and family offices being more comfortable investing in tech-led models. This capital tends to be patient and aligned with long-term goals, not just short-term returns.
"We're seeing a pattern where capital prefers known policy pathways over short-term waiting games. As long as India stays its course, the trade deal may act more as a sentiment bonus than a gating factor," added Sinha.
