India's recent stock market underperformance should not distract investors from the country's strong long-term track record, according to veteran investor Vikas Khemani. Speaking at the ET Alpha Wealth Summit during a panel discussion, Khemani said the current pessimism surrounding Indian equities is largely a reflection of recency bias rather than a deterioration in the country's structural investment case.
"India has delivered far better returns in the last 5, 10 or even 15 years within the emerging market space. It's just that in the last one-and-a-half years, we have underperformed. It is just recency bias regarding the mundane mood surrounding the Indian market," Khemani said.
His comments come at a time when Indian equities have faced mounting headwinds. The Nifty has struggled over the past year and is down about 10% amid slowing corporate earnings growth, elevated crude oil prices, persistent foreign investor outflows and concerns over global trade.
Investor sentiment has also been weighed down by the conflict in West Asia, which pushed oil prices sharply higher and raised fears of inflationary pressures. At the same time, renewed tariff-related uncertainty in global markets and a shift of capital toward artificial intelligence-linked opportunities in markets such as Taiwan and South Korea have reduced foreign investor appetite for India.
