India’s Next Big Moves: 5 Charts That Tell the Story

Over the last few years, India’s markets and macro fundamentals have evolved rapidly, often in ways that headlines alone can’t capture. To help you see the bigger picture, we’ve put together 5 powerful charts that highlight where the opportunities — and the challenges — lie today. From foreign flows and gold reserves to profit margins, defence spending, and clean energy — these snapshots reveal key trends that every long-term investor should understand.

1) Slowing FDI Inflows Despite Strong India Story

Over the past five years, India has delivered one of the strongest macroeconomic performances among major emerging markets — combining healthy GDP growth, resilient corporate earnings, robust equity returns, and contained inflation 

• India’s GDP grew 10.5% p.a. in 5 years.
• Equity returns: 24% CAGR — among the best globally.
• Net FDI hit a 20-year low in FY25.

  Takeaway: Strong local growth, but foreign money is cautious. Stay invested for long-term trends.

Despite short-term outflows, India’s fundamentals remain strong. Disciplined investors can use this phase to build positions steadily and benefit when foreign flows return.

2) Gold’ization — Not Just De-Dollarization 

• The US is struggling to fund large trade and fiscal deficits.
• Big creditors like China are buying fewer US Treasuries.
• Gold is emerging as the main alternative to the dollar.
• In 2024 alone, central banks bought ~1000 tonnes of gold — worth $84 billion.
• That’s nearly 25% of annual gold supply — in just one year!
• A small shift (5%) of global reserves into gold could spark a big price rally.

  Takeaway: Central banks trust gold over other currencies. Strong official demand supports gold’s long-term value.

For investors, gold remains a key hedge in portfolios. Staying diversified with a gold allocation can help protect wealth during global currency shifts.

3) Margins Near Peak — What Drives Profits Next? 

• Since COVID, companies improved profits mainly through higher margins.
• Cost cuts and better balance sheets boosted operating margins.
• Today, margins are near peak levels across most sectors.
• Revenue growth has slowed to single digits for many companies.
• With less room for margin expansion, profit growth may flatten.
• This could challenge stock valuations if topline growth stays weak.

  Takeaway:  Earnings may need topline growth, not just margin gains. Monitor sectors with pricing power and steady demand.

Focus on companies with healthy revenue drivers — not just cost cuts. A well-diversified portfolio can balance this earnings risk smartly.

4) Defence & Aerospace — Strong Growth Momentum 

• Global defence spending rose 9.4% to $2.72 trillion in 2024.
• The US alone will spend $145 billion on defence R&D and procurement in 2025.
• India’s DRDO budget is about $3.2 billion, but domestic production is growing fast.
• India’s defence production is set to grow at ~20% CAGR from FY24–FY29.
• India’s defence market size could reach $676 billion by 2029.
• Rising geopolitical tensions are driving sustained global spending.

  Takeaway: Defence & aerospace is a major long-term growth theme. Strong production pipelines and government push can benefit local players.

Investors can watch for quality companies in this sector as part of a diversified allocation for structural growth exposure. 

5) Energy Transition — India’s Cost Advantage 

• India ranks as the 5th cheapest solar power producer globally.
• India’s solar cost is just $38.3/MWh, cheaper than most developed nations.
• States like Rajasthan give 50% subsidy on green tech — pulling big investments.
• Global companies are switching data centers to renewables + liquid cooling.
• NTT runs two-thirds of its Indian data centers on green power — targets 100% renewables by 2030.
• Hydrogen, solar, and EV batteries are at the core of the global green shift.

  Takeaway: India’s low-cost green energy is a major edge in the global clean transition. Green policies attract capital and enable faster adoption.

Long-term investors can look at energy focus fund which invest across renewables, energy storage, and clean tech companies as part of the structural growth story.

Credits: DSP AMC