Two Years of Waiting. Here’s Why It’s About to Matter.

If your portfolio has felt stuck for the last 18–24 months, you’re not imagining it. Indian markets have delivered poor returns since their peak in late 2024, and the mood has shifted - from excitement to frustration to quiet panic.

Questions are coming in: Should I move to gold? International stocks? Should I just stop my SIPs?

Before you do anything, here’s the full picture.

Why markets have paused: the headwinds are real

Markets had a strong run from 2021 to late 2024, and some of this period involved stretched valuations. The current consolidation is partly that optimism being digested. Layered on top: the Iran-US conflict has pushed oil prices higher, driving inflation fears that compress corporate margins and dampen earnings growth. FIIs, who move markets, recorded their worst-ever year of selling in 2025, pulling out over ₹1.58 lakh crore net. For a dollar-based investor, India comes with currency risk and better-returning alternatives elsewhere. So, they left.

Add to that the global narrative: geopolitical uncertainty is elevated, and global capital is crowding into US tech. India is being ignored.

None of this is wrong. It’s just not the whole story.

The economy, meanwhile, has not stood still

India’s GDP grew 7.8% in Q1 FY26 - the strongest print in five quarters. The IMF projects growth at 6.5 - 6.6% for the full year even under its conservative, high-tariff scenario. Both the IMF and World Bank continue to project India as the fastest-growing major economy in the world. Domestic consumption is strong. Corporate earnings are healthy, with mid and small-cap companies posting strong profit growth in recent quarters. Large-cap valuations have corrected to fair levels. The structural story - demographics, infrastructure, manufacturing, digital economy - is fully intact.

Markets have paused. The economy has not.

The tailwinds that will drive the next leg

India’s oil risk is more manageable than the headlines suggest. With our Forex reserves and expected remittances, India can sustain elevated oil for up to three years without a crisis. Brent has traded in the $95 - 105 range during peak tensions - elevated, but far from catastrophic. Supply diversification is real: Russia, Iraq, Saudi Arabia, the UAE, the US, and multiple African nations now all contribute meaningfully.

More importantly: the fears gripping markets today are temporary. When the geopolitical fog clears, FIIs will return - not slowly, but in a rush. By the time sentiment visibly turns positive, re-entry will already be expensive. The investors sitting in India today will capture the full return. Those who wait for confirmation will not.

India also brings something very few countries can offer: the opportunity to grow fast from a massive base. We are already the world’s fourth-largest economy. The combination of scale, demographics, entrepreneurship, and domestic demand is nearly impossible to replicate elsewhere. When global capital goes looking for large-scale growth over the next decade, there are very few places to go.

What this means for you

The ₹-based investor in Indian equities right now is not in the wrong place. They are simply in the waiting room before the next leg up.

Gold had its moment. International stocks are having theirs - but chasing a concentrated US tech rally at today’s valuations is structurally similar to buying dot-com stocks in 1999. Some will win. Many will lose. The timing has to be perfect, and it rarely is.

The age-old rules haven’t changed: stay invested, maintain your asset allocation, keep your SIPs running. The market rewards patience - not perfectly, not on schedule, but consistently enough that abandoning the strategy near the bottom has always been the worst move.

India’s best years are ahead. You just have to be here for them.

------

The team at Fin and Me Wealth Partners are SEBI-registered Mutual Fund Distributors with ARN: 194729. This article represents our personal views and analysis and is not investment advice. Please consult your financial advisor before making investment decisions.