India Regains Global Spotlight as Investors Bet on Trump-Era Trade Gains

Nifty Hits 7-Month High Amid Surge in Foreign Inflows and Corporate Fundraising

India is rapidly regaining its status as a favored investment destination, with the NSE Nifty 50 Index surging to its highest level since October, buoyed by optimism that India could be one of the first economies to secure a new trade pact with the US under the returning Trump administration. Global institutional investors have responded swiftly, pouring billions into Indian equity and debt markets, while major Indian conglomerates have capitalized on the momentum by locking in substantial offshore financing deals.

Corporate India is already reaping the benefits of this renewed foreign appetite. The Shapoorji Pallonji Group sealed a $3.4 billion private credit agreement, while Reliance Industries secured a $2.98 billion-equivalent syndicated loan, highlighting the confidence that global lenders and asset managers now place in Indian creditworthiness and corporate governance standards.

Highlights:

• Nifty 50 Index at 7-month high, fueled by foreign fund inflows and trade optimism.

• Shapoorji Pallonji and Reliance Industries collectively raised over $6.3 billion in international loans.

• Sentiment driven by hopes India could strike early trade deal with Trump administration.

• Global supply chain realignment and RBI’s dovish policy provide tailwinds for Indian assets.

India Positioned as Beneficiary of Global Trade Realignment Amid US-China Tensions

With the Trump administration rekindling its combative stance on global trade, India’s more insular and consumption-driven economy is once again being viewed as a stable and lucrative alternative to China. India’s lower exposure to US tariffs, especially compared to China, offers a compelling case for multinational firms to shift production and investment. Notably, Apple’s plan to expand iPhone manufacturing in India is emblematic of this transition, although it has faced pushback from Trump, who urged the tech giant to increase domestic US production instead.

Meanwhile, Indian policymakers are making strategic moves to position the country as a critical link in the restructured global supply chain. Commerce Minister Piyush Goyal is set to visit Washington for further discussions, building on President Trump’s recent claim that India has offered to eliminate tariffs on US goods — a statement later clarified by External Affairs Minister S. Jaishankar as still under negotiation.

Highlights:

• India viewed as a trade war beneficiary, gaining from US-China rift.

• Apple’s India expansion triggered criticism from Trump, reflecting friction over offshore production.

• Goyal’s US visit signals continued high-level negotiations on trade cooperation.

• Investors betting on India’s role in global supply chain diversification.

Foreign Funds Reverse Trend, Pour In $2.5 Billion This Quarter After $25 Billion Selloff

After offloading more than $25 billion worth of Indian equities between October and February, foreign institutional investors have sharply reversed course, injecting over $2.5 billion in the current quarter alone. According to a BofA Securities survey, India has emerged as the top investment choice among Asia-focused fund managers, surpassing both Southeast Asian peers and China.

This influx has come despite heightened volatility from India-Pakistan tensions and global market stress. The Nifty Index, which had fallen to multi-month lows in early April, has now rallied within 5% of its all-time high from September, propelled by India’s favorable macroeconomic metrics and relatively stable political climate.

Highlights:

• FIIs reversed selling spree, investing $2.5 billion in Indian markets this quarter.

• India now top investment destination among Asia-based fund managers.

• Nifty within 5% of record high, recovering from April lows.

• Market resilience impresses investors despite geopolitical tensions and global volatility.

Dovish RBI, Macroeconomic Stability Add to India’s Investment Appeal

Adding further fuel to investor optimism is the Reserve Bank of India’s dovish stance, which has brought bond yields to their lowest in more than three years, enhancing the attractiveness of Indian fixed-income assets. New Delhi’s economic planners are also seen leveraging what many describe as a “once-in-a-generation” opportunity to integrate India more deeply into global commerce — particularly in areas like clean energy, electronics, and infrastructure.

With infrastructure-led growth being a key pillar of the Modi government’s agenda, foreign capital is flowing into projects across sectors like solar power, highways, and digital infrastructure, spurred by consistent policy messaging and improved ease of doing business metrics.

Highlights:

• RBI’s dovish policy has reduced bond yields to a 3-year low.

• Investors attracted to India’s high bond yields and equity ROIs.

• Infrastructure projects are pulling in foreign capital across energy, logistics, and telecom.

• India viewed as macroeconomically stable amid global market disruptions.

Risks Persist, But Investors Remain Bullish on India’s Trade and Growth Prospects

Despite the prevailing optimism, investors remain mindful of lingering geopolitical risks, including the potential for further India-Pakistan skirmishes, which could complicate large-scale infrastructure and defense projects. Concerns around over-dependence on global capital flows and the sustainability of earnings in certain sectors also persist.

Nevertheless, macro strategists like Michael Wan of MUFG Bank stress that as long as US-India trade talks progress positively, and India maintains external and internal stability, the bullish sentiment is likely to persist through the year.

Highlights:

• Geopolitical tensions with Pakistan pose potential risk to investor sentiment.

• Investors watching for progress in US-India trade negotiations.

• Macroeconomic stability remains critical to sustaining inflows and growth trajectory.

• India remains a preferred hedge amid global trade and monetary uncertainties.