(MENAFN- The Arabian Post) Matein Khalid

India's NSE Nifty scaled a milestone on Dalal Street this morning, rising 160 points as I write to 26205. This has little to do with Nvidia/Jensen Huang's fabulous guidance last night and everything to do with global fund managers attracted Asia's Cinderella EM of 2025 by the BJP's supply side policy pivot to slash the GST, ramp up post-Bihar election capex, boost consumption even as corporate EPS growth accelerates, post Diwali seasonals are a tailwind for consumer spending (when Maruti Suzuki shares fly on the stock exchange, a games afoot!), the RBI injects liquidity and EM tourists like moi seek to diversify out of the AI proxy markets of Asia led by South Korea and Taiwan.

The Nifty Index is now higher than its level in September 2024 when the foreign exodus from Dalal Street amid a corporate earnings/capex slump made me skeptical of the markets on India's relative performance in 2025. This was vindicated in a year where Poland and Brazil were the superstars du jour delivering with shares like Sao Paulo digital bank Nu Holdings, up 20% and Warsaw's mBank SA, up a fairytale 92% in the Polish zloty. Samba and potato soup is a lethal cocktail in the quest to make money with the shining stars of EM.

Even though the Nifty's forward val multiple of 21 is higher than its 5-year average of 19X, I believe the balance of macro risk now benefits India. One, FII equity inflows have surged in the past month. Two, the big chill in the job market and Trump's heavy breathing dragon fire on the FOMC will mean rate cuts at either the December or January conclaves. Three, India offers a classic domestic growth story with minimal AI exposure to an EM investor constellation that knows that exports/AI will not be the winning formula to print gold in EM.

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Four, underweight India portfolios will have to recalibrate and move out from the ugly step sisters in the Dragon Empire and the Hermit Kingdom into the waiting charms of Bharti Nari Cinderella. This alone promises a 20 to 25% total return on my fave Nifty golden puppies. Five, the latest all time Nifty high above the September 2024 peak constitutes a technical breakout on the charts I cannot ignore. Six, FII outflows this summer have now reversed and turned into inflows. This trend will accelerate in the next 6-months as Fed rate cuts begin while global growth and the AI capex cycle go wobbly. Seven, Trump's punitive tariffs on Indian exports to the US will have to be rolled back and Tariff Man will be forced to share a (veggie) taco with PM Modi.

Eight, the BJP government's measured response to the Delhi blast suggests Modi will not resume Operation Sindoor against Pakistan as long as the trade talks in Washington protect India's economic interests. Nine, the multiplier on the consumption tax cut will quickly boost EPS growth and operating margins for the Nifty's corporate crown jewels. The earnings Downgrade Raj is now over and EPS growth could be as high as 16-17% in 2026 against squat this year. Ten, the post rupee demonetisation zeitgeist has boosted the financialization trajectory of the Indian economy and six billion dollars a month in bids from mutual funds and life insurance companies justify the val metrics that spell“buy Indian equities” to me.

Eleven, the Monsoon rate cut and GST 2.0 mean the mid-cycle pause is over and Indian GDP growth will accelerate to 6.5% again in 2026. I bet my Indian friends celebrate 100,000 Sensex sometime before the next Diwali. Twelve, India's inflation rate has plunged, making Bharat easily the best performing major EM economy of 2025 as China stalls once again. Thirteen, India's is a major global winner from the oil glut and a potential fall in Brent crude to $50 as its energy intensity has plummeted in the past decade. Fourteen, India's current account deficit is a mere 0.5% of GDP or $20 billion chump change. India's interest rate and economic growth volatility is the lowest of any G-20 economy. This alone justifies Nifty's premium valuation and underwrites my bullish view for 2026.

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Time to book my passage to India via ADRs/GDRs of the companies I love and make tax free returns on the Dubai to Mumbai Rupee Express!

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