BetaShares identifies India as a potentially undervalued market, citing recent underperformance, improving fundamentals, and policy reforms that could attract foreign investment, offering a focused entry through its India Quality ETF.
Australia’s share market is heavily skewed towards banks and miners, a structure that can leave investors exposed to the same broad risks. That concentration is one reason BetaShares is pointing to India as a potentially overlooked opportunity, arguing that the market’s recent underperformance may be setting up a more attractive entry point.
The firm says Indian equities have trailed the global artificial intelligence rally, with capital instead flowing towards parts of Asia and the AI supply chain that have benefited more directly from rising spending by large US technology companies. BetaShares also points to about US$29 billion in cumulative foreign institutional investor outflows from Indian shares in the first half of 2026, alongside pressure from a weaker rupee and higher oil prices linked to the Iran war.
India’s reliance on imported energy makes it especially sensitive to shifts in crude prices, and that has fed through to inflation pressures and the current-account deficit. Yet BetaShares says the backdrop is improving. It notes that earnings growth is strengthening on the back of income tax cuts, a rebound in credit growth and firmer demand in areas such as automakers and premium consumer goods. The Nifty 50 is now forecast to deliver earnings growth of 15.2%.
Policy changes could add to that momentum. According to BetaShares, the removal of withholding tax for foreign debt investors may help draw offshore capital into Indian fixed-income markets, while incentives for banks to increase dollar borrowing could ease foreign-currency liquidity. The fund manager says investor positioning remains relatively light, which may leave room for further gains if the improvement in fundamentals continues.
For investors looking for a direct route into the market, BetaShares points to its India Quality ETF, which seeks to track an index of 30 of the country’s highest-quality companies. The index uses a combined ranking of profitability, leverage and earnings stability, offering a focused way to access a market that some now see as a hidden giant in global investing.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
