Tariffs & tailwinds: How India looks in global context

There’s a line I’ve always found instructive, attributed to the famed investor Peter Lynch: “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves.” It speaks to the delicate balance between foresight and patience—something we’ve been practicing a lot lately.

Over the past year, many of us at the helm of capital have found ourselves in markets that don’t quite follow the rules of the street. Interest rates peaked, inflation cooled, but risk appetite remained hesitant. A correction here, a rally there—and underneath it all, the quiet beat of a recovery waiting to be recognized.

It appears that India’s GDP growth may have found its footing again. We're seeing signs of revival—slow, perhaps, but gaining pace. Our internal models and market cues suggest a return to the 6%+ growth range, backed by a combination of lower interest rates and deliberate liquidity support from the RBI. Inflation, that ever-watchful beast, remains controlled for now—giving policymakers more room to manoeuvre.

Why does this matter to equity markets? The connection is more than academic. Lower rates soften the discounting mechanism that valuations hinge on. That doesn’t mean prices go up immediately, but it allows them to stop falling. It steadies the floor under the market. And in times like these, a firm floor is a gift.

Let’s get to NIFTY50 earnings growth. The estimates on the street and our own internal estimates suggest nothing euphoric, but yet they appear solid. We do anticipate some downgrades in FY26, perhaps due to global volatility or the lagged effects of past rate hikes. But FY27? That looks more stable. The recent Trump tariffs, which stirred anxiety across global trade corridors, have had lesser impact on India so far—especially when compared to other China+1 destinations. That resilience matters. It buys us time and conviction.

Now, let’s talk about valuations. I’d say we’re in the process of reversion—perhaps not to the mean, but in that direction. Large and small caps are gently drifting back toward their long-term averages. Mid-caps, on the other hand, remain expensive—like a party that started early and refuses to end, even as the lights begin to dim.

Interestingly, some of the most attractive opportunities today are not in the hottest themes, but in sectors that are quietly realigning with historical valuations: Financials, Consumer Goods, and Oil & Gas. These aren’t flashy, but they’re foundational. And sometimes, foundations are where we may find the value.

Our equity strategies have long favoured secular businesses—companies with enduring demand, strong moats, and the ability to reinvest capital efficiently. For three years, this positioning felt like waiting in a long queue. Now, it’s starting to pay off. Seculars are stirring again. Perhaps the market is once more rewarding consistency over novelty.

This brings me to the present question: how should one deploy capital?


Carefully. Selectively. And with a sharp eye on valuation. The time for blind buying is past; the time for thoughtful accumulation has arrived. Large caps are reasonable. Select opportunities are emerging within small-cap stocks. Mid-caps? I’d tread carefully there—they’re still priced for perfection in a world that’s anything but.

I’ll close with a reflection I’ve often shared with my team: “In investing, cycles matter more than stories, and discipline matters more than direction.” Right now, the cycle is turning. The economy is stabilizing. Markets are correcting. Valuations are normalizing.

And in this normalization lies opportunity—subtle, selective, but significant.


(The author is Co-Founder & CIO, 360 ONE Asset)



(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com)