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Middle-class Indians have been plowing their savings into the stock market, making it far less vulnerable to the shocks of a trade war.
Sept. 8, 2025, 12:01 a.m. ET
Foreign investors were already on the run from India’s stock markets even before President Trump declared economic war on India.
But the two main stock indexes in Mumbai, India’s financial capital, are up 10 percent over the past six months. And they have barely budged since Mr. Trump’s 50 percent tariffs on India took full effect in late August.
The reason: Indian investors keep pouring money into stocks as fast as foreigners are taking money out, providing a measure of relief for the country’s businesses and economy.
The emergence of India’s homegrown investors as this year’s unsung hero reflects the growing confidence of India’s middle class and the development of its domestic financial sector.
Foreign investment accounts for a far smaller chunk of the markets than it did 10 years ago, said Harsha Upadhyaya, a mutual fund manager at Kotak Mahindra Bank in Mumbai. Foreigners once owned 24 percent of stocks in India’s markets, but now hold barely 16 percent.
“The flows used to be dominated by foreign institutional investors, and that’s when their view mattered a lot,” Mr. Upadhyaya said.
