Indian shares and bonds will be performing better than their equivalents, Franklin Templeton thinks, citing the country’s growing appeal as a safe bet from tariff risk.
The country looks “best positioned” to take advantage as a gigantic domestic market keeps the drag on the economy contained, YiPing Liao, portfolio manager of Franklin Templeton Emerging Markets Equity, wrote in a media webinar Wednesday. “The tariff war seems to be deflationary from a commodities perspective, which is also positive for India.”
Franklin Templeton is among other global money managers singling out India as the bright spot, thanks to its home bias economy, low reliance on exports, and progress in trade talks with America. Indian equities erased all the losses the previous week from Donald Trump’s April 2 revelation of retaliatory tariffs, being the first major market to recover, as its debt has provided the best returns in the region so far in 2025.
India’s domestic-currency sovereign bonds have paid investors a return of over 4.9% this year, as per figures collated by Bloomberg. Equities markets were up nearly 3%, defying most regional peers. Foreign funds are coming back on a trickle with over $200 million of equities and $104 million of debt being acquired this week.
