Nowsine Zaidi, a 38-year-old health worker who grew up in New Delhi, said his parents invested in fixed deposits, life insurance and land.
However, after her husband introduced her to the stock market in 2012, Zaidi became smaller from there, pouring money into mutual funds and later investing Rs30,000 ($350) between the pandemic and “taste blood,” she recalls. Zaidi said her investments have quadrupled in value and continue to split monthly savings between mutual funds and stocks.
Zaidi is one of the millions of Indians who continue to put money into local stocks despite the foreign money outflow, and the country’s burgeoning culture of equity shows that markets can help endure the conflict from Donald Trump’s tariffs.
According to the National Stock Exchange of India, domestic investors had won a record $72 billion during the fiscal year by the end of March, while foreign investors had withdrawn $14.6 billion.
A massive influx of what market regulators once called “elusive” retail investors has raised domestic holdings to more than 26% of the market, compared to 17% of foreigners as of December 31. The balance is held by the company’s founders, national insurance companies and states.
Resilience of retail investors demonstrates the increased maturity of Indian stock markets and the ability to separate them from the flow of international capital. On Tuesday, the Nifty 50 index recovered mainly losses after Trump’s “liberation day,” making India the first major market to fully recover from tariff disruptions.
The industry group said the change reflects Indian investors who have moved away from low-interest rate fixed deposits and view local stocks as viable long-term investments.
India’s Mutual Funds Association (AMFI) said in a report last month that growth in mutual fund assets led to an increase in bank deposits between 2019 and 2024.
Devarajan Nambakham, co-head of Indian investment bank for Goldman Sachs, told the Financial Times that the market remains healthy despite foreign outflows as “domestic liquidity remains available.”
One of the main avenues for retail investors is the systematic investment plans offered by mutual funds that have in recent years have largely promoted their products as a reliable investment vehicle.
Of the total number of such plans, “In effect, many of this has not seen corrections or experienced the bear market as 65% began after Covid,” said Siddhartha Bhaiya, managing director of Mumbai-based assets manager Aequitas.
According to the Securities and Exchange Commission of India, the amount managed to $124.3 billion through SIPS between 2019 and 2024 to $124.3 billion, and the number of deposit accounts for deposits to $124.3 billion between 2019 and 2024, said AMFI was to $124.3 billion.
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In its 2025 strategy note in January, BNP Paribas said that the increase in retail investors’ share is driven by AMFI’s long-standing efforts to promote “the benefits of equity as an asset class.”
All of these factors “created the insanity of not having to invest in fixed deposits,” says Bhaiya of Aequitas.
“When the stock market can give a 7% return in a month,” he said.
The NIFTY 50 index has risen 8.4% over the past year, compared to a 5.4% increase in the S&P 500 on Wall Street. Meanwhile, India’s benchmark report rate is 6.25%.
Many retailers who entered the Indian stock market during the pandemic boom were surprised by the revision at the beginning of the year, with the Nifty 50 down 10% from the peak in September 2024 to early March.
This marked the first time since 2019 when data was published, resulting in a suspension that exceeded the new SIPS in January. The numbers worsened in March, with 5.2mn hanging full of new ones for 4 million people.
Those who are new to the market are “not used to such corrections,” said Puru Date, a 57-year-old former IT consultant in Pune, the western city of Pune, who began investing in 2018.
The Nifty 50 remains below the September 2024 peak, but recovered some of those losses.
Still, some analysts said the suspended SIP increase was temporary and “appears to have more perseverance,” AMFI said, “it is focusing on creating long-term wealth.”
Mutual funds are steadily increasing their market share, accounting for 9.5% of the total market capitalization of listed companies in September 2024, up from 7.2% in March 2019 with the latest available data.
According to AMFI, retail investors “like for a disciplined investment approach through cost-effective investment products such as SIPS and Passive Funds.” Approximately 16% of total AUM consists of the passive fund tracking index as of February.
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The date that the investment began with “conservative” RS1.2MN has around Rs 100,000 in stock after the pandemic boom compared to mutual fund RS3MN and local bond RS2MN. He is trying to rebalance his portfolio.
“I’ve shifted gear for the past three or four months,” he said. “I invested in Indian bonds that will give me more stability in my portfolio.”
Zaidi, a healthcare worker, continues to put 60% of his savings in mutual funds.
“Whatever the fairness we’re building now, it’s not for our current use,” she said. “We are considering a long-term plan.”
