During the third quarter of 2025, the India Fund faced a significant downturn, registering a 7.01% decrease in value and falling short of its benchmark by 41 basis points. This decline was largely attributable to strategic missteps in stock selection within the consumer discretionary and financial sectors. Conversely, the fund's investments in industrial, healthcare, and energy companies provided some positive offsets, mitigating what could have been a more severe impact from the market's overall challenges.
The quarter was characterized by a confluence of adverse economic factors that collectively pressured Indian equities. Notable among these were the implementation of US tariffs, which introduced uncertainty into global trade dynamics, and sustained selling pressure from foreign institutional investors, signaling a cautious stance on emerging markets. Additionally, a depreciation of the Indian rupee further complicated the investment landscape, eroding returns for foreign investors and increasing import costs. Despite these hurdles, the fund's strategic allocation to infrastructure capital expenditure-related assets within the capital goods sector demonstrated commendable resilience, indicating the potential for growth in specific segments of the Indian economy.
While India's long-term growth narrative remains robust and largely unassailable, the immediate future presents a series of challenges that demand careful navigation. The global economic environment, particularly the implications of US tariffs, continues to cast a shadow over market sentiment. However, the performance of infrastructure-related investments highlights the enduring strength of domestic growth drivers. By focusing on fundamental value and strategic sectors, investors can find opportunities for sustainable growth, contributing to both individual prosperity and national development.
