Freeman said recent underperformance in Indian equities should be seen against the backdrop of extraordinary global developments rather than a deterioration in India’s economic fundamentals.

“There is a lot of volatility caused by the war and AI‑related investments are soaking up global liquidity,” he said, adding that India continues to achieve high growth and that trajectory will be sustained.

He noted that domestic investors have cushioned the impact of foreign institutional investor (FII) outflows this year and predicted that overseas capital would return once valuations become sufficiently attractive.

Freeman believes that periodical flare ups will occur related to the United States‑Iran conflict, and investors should not expect a quick resolution. Supply disruptions linked to the conflict could reduce the availability of fertilisers, potentially driving food prices higher globally, he noted.

He also mentioned artificial intelligence as a major theme reshaping global capital flows, and massive investments being made in AI infrastructure, data centres and semiconductor manufacturing.

Freeman, however, cautioned that returns on those investments could take several years to materialise. He also dismissed concerns that the recent correction in semiconductor stocks reflects a structural downturn, the report said.

He attributed downside in semiconductor stocks to elevated valuations and persistent supply constraints.

Meanwhile, Goldman Sachs has raised India’s GDP growth forecast to 6.8 per cent for calendar year 2026 from 6.5 per cent earlier, following the US-Iran peace deal that has led to lower global oil prices and eased supply chain disruptions.

The investment bank has also raised its FY27 GDP growth forecast for the country by 40 basis points to 6.5 per cent.