Ahmedabad: Indian stock markets witnessed a strong rally on Tuesday as they reopened after a long weekend. The Nifty 50 index surged by 2%, surpassing its previous closing level of 23,332 from April 2 during intraday trading. With this rise, India became the first major stock market globally to fully recover from the losses caused by U.S. President Trump’s tariff policy. In contrast, the main indices of other Asian markets remain over 3% lower.

Amid global market volatility, investors are now viewing India as a safe investment destination. The Indian economy is considered more resilient to a potential global recession, while many other countries are more directly impacted by U.S. tariffs.

As the trade war between the U.S. and China intensifies, India is increasingly being seen as an alternative manufacturing hub. While China has responded aggressively to U.S. tariffs, India has adopted a more measured approach and is attempting to reach a temporary trade agreement with the U.S.

Global market experts have noted that India’s domestic growth remains strong, and the potential shift of supply chains away from China makes India an attractive and safer investment option.

In the past two quarters, the Indian stock market had declined by nearly 10%, driven by concerns over economic growth, high stock valuations, and heavy selling by foreign investors. So far this year, foreign investors have sold over $16 billion worth of Indian equities, compared to $17 billion in 2022 — the highest on record.

However, there are now signs of recovery in the market as stock prices have become relatively cheaper. There is also an expectation that the Reserve Bank may cut interest rates to support the economy. Additionally, the fall in crude oil prices has boosted investor sentiment.

Although India is not completely immune to U.S. tariffs, its direct exposure is much lower compared to other countries. India’s reliance on the U.S. is limited, particularly in terms of goods exports. If crude oil prices remain low, Indian equities are likely to benefit further.

According to data, India accounted for just 2.7% of total U.S. imports in 2023, compared to China’s 14% and Mexico’s 15%. For these reasons, India is increasingly being seen as a lower-risk market amid global tensions.