In this interview, Sawrikar shares his views on Budget 2026, global diversification, trade deals and the evolving role of commodities in investor portfolios. Edited excerpts:
Q) How has Budget 2026 worked out for Indian investors investing in global markets?
A) Budget 2026 is generally constructive for Indian investors with global exposure. Measures around capital market reforms, tax certainty and strengthening IFSCs such as GIFT City improve cross-border capital flows and market confidence.
However, the absence of further relaxation, such as a reduction in the TCS below the LRS for foreign investments, remains a hindrance. This reflects policy caution that may prevent Indian investors from taking full advantage of global market opportunities.
Q) Do the recent India-US and India-EU trade deals strengthen the investment case for these markets?
A) The trade agreements improve India’s global positioning by increasing market access and reducing policy uncertainty. They support export-led growth and supply chain integration. While not an immediate cause for a revaluation of the broader market, such deals are critical to India’s next phase of growth. If an agreement had been made between India and the EU fifteen years ago, textile exports could have been significantly higher. To reach ten trillion dollars in GDP, India will need expanded trade partnerships.
Q) How do Indian market valuations compare globally over the long term?
A) Indian equities trade at a premium to most emerging markets, supported by better visibility into growth and domestic demand. Valuation gaps with developed markets have narrowed.Sustaining this premium will require productivity-driven earnings growth, similar to what the United States experienced through efficiency gains and reforms in the 1990s.
Global diversification and structural improvements are essential for long-term investors.
Q) How should investors consider currency risks, especially the depreciation of the INR?
A) Currency is a key factor in global investing. A depreciation in the INR can increase returns on foreign investments, but it also creates volatility. Investors should assess global allocations on a risk-adjusted basis, taking into account long-term hedging costs, taxes and currency trends rather than short-term movements.
Q) What could be an ideal asset allocation for investors betting ten lakh rupees or more?
A) A diversified portfolio may contain 50 to 60 percent Indian assets, 20 to 30 percent international equities, 10 to 15 percent fixed income and a modest allocation to gold or commodities, tailored to risk appetite and investment horizon.
In practice, ten lakh rupees is often a relatively small starting amount for overseas diversification. Global funds often require larger minimum investments, and currency differences and transfer fees can significantly impact returns at smaller ticket sizes.
Q) Will commodities play a greater role in portfolios in the future?
A) Commodities may gain relevance as a result of structural themes such as the energy transition, geopolitical shifts and supply chain realignment. Precious metals have delivered meaningful, relatively uncorrelated returns in recent years.
However, given their volatility and potential for sharp price declines, commodities are best used as a diversification tool and considered only after investors feel comfortable with major global allocations in traditional asset classes.
(Disclaimer: Recommendations, suggestions, views and expert opinions are their own. These do not represent the views of The Economic Times.)
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