What To Buy In India: Shikhara's Rahul Chadha On Gold, Banks And Travel Themes

India remains one of the brighter spots in global markets as investors digest a volatile mix of trade updates, shifting US policies, and capital flows. Rahul Chadha, Founder and Chief Investment Officer at Shikhara Investment Management, says while Indian markets are not cheap, the long-term structural story still stands tall.

“In the last week, we started seeing some relief,” Chadha said, referring to the United States’ evolving stance on tariffs. “The US said reciprocal tariffs were the highest and numbers can only go lower. As you go through the practicality of it, you see more and more exceptions—like the auto exemption, and what happened prior to that with semiconductors and cellphones.”

Chadha expects base-case tariffs in the 10-20% range for most economies, with China seeing higher rates of 20-30%, followed by a six-month negotiation period. In the meantime, investors are rotating into safe-haven assets like gold—but he believes attention will soon shift to equity markets that are positioned to benefit from the fallout.

“The market is not cheap, but the growth story and return on equity is better than most emerging markets,” he said. He sees value in Indian large-cap banks, which have gone through a correction and not participated in the broader rally over the last 12-18 months. “There’s value there."

On the midcap side, Chadha is optimistic but selective. “Travel, tourism and hospitals are some themes we like.”

Chadha believes the ongoing shift in global supply chains will resemble the structural change seen after China joined the World Trade Organisation. With the United States aiming to bring manufacturing back and cut its trade deficit, he sees a transition in motion.

“What happened over the past 10-15 years—most US companies outsourced production to China—is going to reverse,” he said. “US margins, which are at record highs of 13-14%, will normalise to 9-10%. That means 2-3 years of price and time correction in the US. That’s when money comes to countries that grab the opportunity.”

India, he argues, is well-placed to capture some of this shift—if it can build the right ecosystem. “It’s not that industries will move overnight. You have to provide a conducive environment. A lot of industries like maybe auto part systems can come into the country.”

He compares this phase to a “China-like opportunity” for India, provided policymakers and industry players move swiftly and in tandem.

In these uncertain times, Chadha is also backing gold as a safe bet. “I was so bullish about gold that my wife, who used to make cakes, made one with me wearing gold chains and asking people to buy gold.”

With the US dollar expected to eventually settle lower, he sees gold performing well for the next year or two before investors rotate back into risk assets and Wall Street.