According to Tarun Birani, Founder & CEO of TBNG Capital Advisors, NRIs maintain cautious optimism toward India despite recent market challenges. The Nifty has remained sideways near 24,000 since mid-2024, while the rupee has depreciated roughly 10-11% over the past year to around ₹95 to the dollar. However, domestic institutional ownership has crossed 18.9% and now exceeds FPI ownership at 14.7% - a 13-year low. As reported by The Economic Times, this structural shift means ₹31,000 crore of SIP money flows in every month for 53 consecutive months, fundamentally changing the market's crash profile for volatility-wary investors. In March 2026, foreign investors pulled out a record ₹1.18 lakh crore, but the Nifty fell only 11% compared to previous cycles where similar selling would have caused a 20-25% crash. This resilience demonstrates India's transformation into a twin-engine market with domestic institutions absorbing significant foreign outflows.
India's economic fundamentals remain compelling with real GDP growth at 7.4-7.7% and corporate balance sheets showing significant improvement. According to the analysis, bank Tier-1 capital adequacy stands at 16.4% with Gross NPAs at multi-decade lows, while debt-to-equity on the NSE 500 is at 1.0x - the cleanest level since FY11. The government has increased capex from ₹124 billion in FY14 to ₹1,898 billion in FY26, with forex reserves near $688 billion and services trade surplus reaching 5.6% of GDP. Corporate ROEs remain in recovery at 15% for NSE 500 ex-financials against a previous peak of 22%. A particularly compelling factor is the domestic capital flywheel, where equity and mutual fund participation in household savings has grown from 2% in FY12 to 15.2% in FY25, creating a structural buffer against sharp corrections. The shift of Indian savings from gold and property into financial assets is still early, with monthly SIP flows now running above ₹30,000 crore and mutual-fund folios having grown exponentially in the past decade.
For a ₹50 crore India-focused portfolio, Birani recommends a 70:30 equity-debt risk profile with systematic deployment over 12-18 months. The framework includes 60-70% in India equity through diversified large-cap and flexicap exposure, 15-20% in debt and fixed income anchored by NRE and FCNR deposits, 5% each in REITs and commodities, and 5% in alternatives for qualified investors. As reported by The Economic Times, the structure emphasizes rupee cost averaging and written Investment Policy Statement with defined rebalancing bands, ensuring that structure around the portfolio matters as much as the portfolio itself. The allocation should be goal-aligned, with rupee assets serving as natural hedges for future rupee liabilities, while pure return-seeking capital should treat India like any emerging market sleeve at 10-25% of financial assets. According to Sanctum Wealth's Shiv Gupta, the India wallet is personal in ways a benchmark cannot capture, allowing for larger weightings based on family ties and potential return to India, making it distinct from purely global or residence-market allocations.
NRIs face significant currency headwinds with the rupee depreciating from ₹63-67 a decade ago to ₹94-95 currently, representing approximately 3.5-4% annual depreciation. According to the analysis, Nifty's 12% long-run rupee total return becomes closer to 8% in dollar terms once currency adjustments are made. Birani warns against extrapolating recent currency volatility, noting that the 10-11% rupee fall was amplified by West Asia tensions, FPI outflows, and an oil spike. He emphasizes measuring returns in the currency of actual spending and treating India as a genuine diversifier rather than a replacement for developed-market holdings. The rupee has historically weakened in stages involving a sharp adjustment followed by a long plateau, averaging roughly 3-4% a year over the long run. As per Sanctum Wealth, the useful question is not whether the rupee will weaken, but whether Indian assets can clear a 3-4% currency hurdle and still leave the investor ahead. For well-chosen businesses compounding earnings in the teens, the answer has usually been yes, with short-term exchange rates mattering far less than long-term earnings growth.
The post-July 2024 tax landscape has created significant compliance challenges for NRIs, with equity LTCG now at 12.5% above ₹1.25 lakh and STCG at 20%. As reported by The Economic Times, common mistakes include failing to update residential status, confusing NRE and NRO accounts, and not obtaining Lower Deduction Certificates upfront. For US persons, Indian mutual funds may be classified as PFICs with punitive tax treatment, while estate planning gaps often remain incomplete with no Indian wills or mismatched nominations. Birani emphasizes the need for coordinated cross-border advisor pairing to navigate these complex regulatory changes effectively. The new Income Tax Act 2025 took effect on 1 April 2026, with many older mental models now wrong, making compliance more critical than ever. Sanctum Wealth notes that recurring mistakes often include not updating residential status with banks and intermediaries after becoming an NRI, using the wrong account types (NRE and NRO are not interchangeable), and underestimating how capital gains, interest income and repatriation are taxed. Many also fail to use the relevant tax treaty between India and their country of residence, resulting in double taxation.
