Indian stocks lagged as Asia and emerging markets soared in 2025

Business Dec 31, 2025

Indian stocks had a tough year, rising just 2.2% in dollar terms—way behind the big gains seen across Asia and other emerging markets.
Even so, strong local investments helped Indian markets notch up their 10th straight year of overall growth.

Why did India fall behind?

Record foreign outflows of $17.8 billion dragged down returns, despite hefty support from local investors.
The rupee's 5.3% drop and slower earnings growth didn't help, while high US tariffs on Indian exports added more pressure.

What's next for India's market?

Despite this rough patch, analysts are still upbeat about India's future earnings—expecting some of the strongest growth in EM Asia for the next two years.
If trade tensions ease and earnings hold up, the Nifty could see significant growth by December 2026.