At a recent Punica Invest webinar, Aubrey’s John Ewart and Klyzza Lidman make a case that two years of neglect have made India’s long-term case more compelling, not less.
For the past two years, enthusiasm for artificial intelligence has drawn emerging markets capital towards the chipmakers of Korea and Taiwan. India, long a favourite of long-term investors, has been left behind. Yet beneath the headlines, its fundamentals remain firmly intact.
John Ewart, Director and Investment Manager at Aubrey Capital Management, set out the structural case. India is now the world’s most populous country and is on course to become its third-largest economy this decade. “More people earning more money in a growing economy is a positive combination for us as investors,” he said. Inflation has fallen to a low of 2% last year, and real growth is running at 6–7%. Meanwhile, the market has de-rated to below its ten-year average valuation just as earnings accelerate: profit growth reached 18% in the quarter to June 2026, the strongest in ten quarters.
Klyzza Lidman, Investment Analyst, pointed to the forces underwriting that recovery. Bank credit growth is above 18%, the current account deficit is at a record low of 0.8%, and the government’s manufacturing incentives have attracted more than $28bn of investment. Foreign ownership has fallen to a fourteen-year low of around 15%, while domestic investors have lifted their share to a record 19%. Lidman called this “a structural shift that makes India less dependent on foreign sentiment.” In the portfolio, these themes are expressed through companies such as Nykaa, Titan and Eternal, which benefit from premiumisation, the formalisation of retail and the rapid rise of quick commerce.
None of this suggests India is without challenges. Income inequality remains wide, and around 65% of the population still lives in rural areas on far lower incomes. Ewart pointed to reforms in housing, healthcare and direct benefit payments as the building blocks of broader prosperity, but acknowledged that “this will take decades.”
That is why, for Ewart, the case for India is not a case for passive exposure. Around 80% of the strategy’s outperformance has come from stock selection. “Please do not simply think this is an opportunity to buy the India country ETF,” he cautioned. “It isn’t.” For disciplined, active investors, the opportunity lies in finding the right companies at the right time.
