India to outperform emerging markets: Jefferies

New Delhi: Global brokerage Jefferies has issued an ‘overweight’ call on India, saying that the country is set to outperform other emerging markets (EMs) amid rising global uncertainties. In its latest note, Jefferies said while absolute index performance is difficult to predict, “India should emerge as a relative outperformer”.

Jefferies added that India’s limited exposure to US and Chinese demand is a key buffer. India’s exports to the US stand at just 2.3 per cent of its GDP, even as the US is its largest export partner. Trade surpluses are equally modest, reducing the impact of a hardline US trade policy.

The US has imposed 26 per cent tariffs on Indian goods. But that figure is still less in comparison to the levies imposed on China, Indonesia and Taiwan. “In fact, the Indian government has sounded fairly confident about securing more favourable terms under bilateral trade talks with the US,” according to the Jefferies note.

With Brent crude sliding nearly 20 per cent year-to-date to around $60 per barrel, India, a major net oil importer, is seeing a windfall. Jefferies holds that the decline improves the current account balance, makes up for potential reduction in US trade surplus, and even gives the government a revenue boost from higher fuel duties. The brokerage has a preference for lenders, power, telecom, autos and real estate.

Foreign and domestic investors showed strong confidence in the Indian equity market in March 2025, with both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) emerging as net buyers.