'Math Is Turning Favourable For India' BofA's Amish Shah Breaks Down Positives For 2026 Outlook

BofA India Research Head Amish Shah reiterated the visibility of an upside is more certain for Indian markets. The brokerage has forecasted 11% upside for Indian markets in the current calendar year as the math is turning favourable for India.

A trade deal with the US is important as it could lead to a foreign fund inflows. Historically, when the US dollar depreciates, and the US Federal Reserve reduces rate, flows turn in the favour of emerging markets. In the lower interest environment, investors try to look outside for better opportunity in the emerging markets, he said in an interview to NDTV Profit.

In calendar year, 2026, BofA expects that the dollar index will depreciate and the US Fed will reduce rates, he said.

Foreign Institutional Investment will also depend on an asset-class perspective. One could argue that higher 10-year bond yields, rupee depreciation risk, and equity-risk premium don't translate to 115 return visibility, FII flows maybe away. However, this time, the math is turning favourable for India, he said.

BofA also expects that the earnings growth may accelerate, according to Shah.

Markets have priced in that the trade deal with the US will happen. They have also priced in that the tariff will be somehwhat lower than 25%. Market participants have considered that 25% itself is very high so, somewhere between 16–25% where the tariff rate will be set he said.

Now, in case a delay happens and the expectation does not come true, markets have to reprice the fact that tariffs are actually higher. There will be a downside risk, he said.

For the last one year, BofA was not excited about Indian markets. After the NSE Nifty and the BSE Sensex scaled a fresh high in September, the global brokerage expected that markets will likely give flat returns in the November note for 2025, he said.

BofA projected around 10% return in this calendar year, which is where the current returns stand.