Despite the ongoing market volatility and geopolitical uncertainties, India remains firmly at the centre of global emerging market allocations, said Rahul Malhotra, region head of emerging markets and member of the global wealth management committee at Julius Baer Bank. Investors are likely “to start looking at India more actively again” by the end of the September quarter, he told Mint in an interview.
Malhotra said investors remain positive on India, although many are currently in a wait-and-watch mode due to the geopolitical tensions, oil price risks, and broader macro developments.
“Are we continuing to see interest in India? The short answer is yes,” he said.
Malhotra added that while investors had become accustomed to 25-30% returns in recent years, such gains are not sustainable indefinitely and expectations will need to normalize over time. While investors may tactically shift allocations between asset classes such as equities, fixed income, gold, silver, or private investments depending on the environment, the broader approach remains to stay invested, he added.
“So, broadly, we are neither trimming exposure to India nor aggressively doubling down; we are staying invested, while also remaining tactical where needed.”
Over the past one year, India's benchmark Nifty 50 has fallen about 5%. And barring a brief buying spell in February, foreign institutional investors have remained net sellers of Indian equities in every month of 2026 so far, showed Bloomberg data.
Where NRI portfolios focus
Allocation trends among non-resident Indians (NRIs) vary sharply by geography. But broadly, India continues to remain a “core allocation” for NRIs worldwide, Malhotra said.
Singapore-based NRIs typically run globally-diversified portfolios across the US, Europe, the UK, and regional markets such as Singapore, Indonesia and China, alongside emerging markets such as India, Latin America, and Southeast Asia, he said.
On the other hand, Dubai-based investors tend to have lower exposure to the local markets, and therefore allocate more towards India, driven by proximity, familiarity, time-zone comfort and a large Indian diaspora in the Gulf region.
Many NRIs also continue to re-invest India-linked income—from real estate, inheritance and business divestments to existing portfolios—back into Indian assets.
Typically, India exposure for NRIs remains in the “8-12%” range through both offshore dollar-based investments and direct rupee allocations.
Long-term confidence intact
Investors are becoming more cautious amid global volatility and the spillover impact of the West Asia war on equities. As the returns moderate, investors are leaning towards staying invested in quality blue-chip names rather than taking aggressive risks, said Malhotra.
There is also near-term scepticism around the revival in earnings growth, with investors largely in a “wait-and-watch” mode amid geopolitical tensions. He, however, strongly feels that India's broader macro story remains intact. “Nobody can really call the exact market bottom, but as things begin to stabilize, especially towards the latter part of Q2 (July-September), investors are likely to start looking at India more actively again.”
Prime Minister Narendra Modi recently described the West Asia war as one of the decade’s major crises and renewed his call for economic restraint and support for the government’s austerity measures.
In a May 9 report, Goldman Sachs said that after a prolonged and deep foreign exodus from Indian equities, investors are questioning whether lower oil prices could trigger a strong return of foreign inflows. Goldman Sachs, however, said it thinks "while foreign selling may be near its exhaustion, inflows may wait a while”.
Markets had also run ahead of themselves from a forward price-to-earnings perspective, and the recent correction in valuations is now creating more attractive re-entry opportunities for investors, according to Malhotra. “You need to be mindful, you should not go all in. But at the same time, you should just remain invested.”
Wealth creation in India
What truly stands out in India, for Malhotra, is the scale of wealth creation happening beyond the metros.
In smaller cities, entrepreneurs and business families are now talking about “Rs100-200 crore portfolios” and increasingly seeking professional wealth management advice, he said.
Recalling a recent visit to Taj Lake Palace in Udaipur after nearly 15 years, he said what stood out was that most guests at the premium luxury property were affluent domestic Indians, unlike earlier when the hotel was largely filled with foreign tourists—reflecting India’s rising consumption and wealth story.
Malhotra also spoke about meeting two entrepreneurs in their late 30s in Mumbai, who had recently sold their company and were looking to invest a ₹500 crore portfolio in India.
“These are conversations that were almost unheard of a decade ago,” he said, summing up the change in the country.
India has been an important market for Julius Baer for over three decades and remains one of its strategic growth priorities globally. Over the last four years, Julius Baer has meaningfully expanded its India presence to over 13 locations, alongside continued investment in talent, with its relationship manager base growing by 30%.