10 Market Lessons from 2025: What Indian Investors Should Watch in 2026

2025 was a roller‑coaster for Indian markets. Below are the most useful takeaways that can guide retail investors as they step into 2026.

1. Indians Are Investing Abroad More Than Ever

Even though Indian equities lagged global emerging‑market indices, many investors bought overseas assets such as Korean and Brazilian ETFs, commodity funds, and defence stocks. The liberalised remittance scheme now allows up to $250,000 per person, and about $2 billion was sent abroad in the first half of the fiscal year—up 35% YoY. This shows a clear shift toward global diversification.

2. Retail Money Keeps Domestic Stocks Supported

Continuous inflows into mutual funds have helped large‑cap Indian stocks stay in demand. While many global peers trade at cheaper multiples, the steady retail flow also reduces index volatility, giving investors more confidence to allocate savings to equities.

3. Tariffs Didn’t Trigger the Expected Recession

Higher U.S. tariffs were expected to spark inflation, force the Fed to raise rates and slow growth. Instead, tariffs added about 1% to U.S. fiscal revenue and AI‑related capital spending kept the economy growing. The feared inflation spike never materialised, reminding us that simple cause‑and‑effect stories can be misleading.

4. IPO Activity Remains Strong Despite Weak Markets

India is on track for a record number of IPOs—close to 100 new listings—while the Nifty and Small‑Cap indices posted modest or negative returns. Investors are turning to fresh issues because many existing stocks have low liquidity, making IPOs one of the few ways to deploy large sums without moving prices too much.

5. Industry Consolidation Can Hurt Consumers

More companies are merging in sectors like aviation and cement, creating duopolies or near‑monopolies. While this can boost investor returns, it may also lead to higher prices or regulatory caps that eventually hurt profitability.

6. New Entrants Can Upset Established Players

When a well‑funded competitor enters a stable market, incumbents often lose market share and see their stocks re‑priced lower. Examples include Reliance in telecom and Meituan in Middle‑East food delivery. Waiting for the new competitive balance to settle can be a wiser strategy than betting on the old leaders.

7. The Rupee Is Slowly Returning to Its Long‑Term Average

The Indian rupee was the weakest Asian currency against the dollar in 2025. Over the past six months it has begun to correct an earlier over‑valuation, moving back toward its real effective exchange rate. Currency moves are mean‑reverting, but the timing can vary widely.

8. Numbers Don’t Tell the Whole Story

Even though buying a home often looks less profitable than renting on paper (rental yields ~3%), many Indians still prefer ownership for psychological comfort and the flexibility it gives their broader portfolio. Likewise, most mutual‑fund investors stick with distributor‑run (regular) plans even though direct plans are cheaper, because a trusted adviser can help them stay invested longer.

9. Gold’s Traditional Drivers Have Shifted

Gold used to rise when real yields fell. Since the Russia‑Ukraine war, gold has kept climbing even while the Fed was tightening, because investors now view it as a hedge against a wide range of risks—geopolitical, inflationary, or systemic. Past macro relationships no longer predict gold’s moves reliably.

10. Investing Is Full of Contradictions

Advice like “don’t catch a falling knife” and “buy when there’s blood on the street” can both be true at different times. The market constantly teaches new lessons while unlearning old ones. Embracing this uncertainty can turn investing into a lifelong, engaging pursuit.

Remember, these insights are personal observations, not predictions. Do your own research and consider your own risk tolerance before making any investment decisions.