The ongoing economic war between the USA and other countries has led to a great money imbalance throughout the world. However, India’s stock market is thriving despite a 50% tariff imposed by the US government. Since last year, foreign investors have been hesitant to invest in the Indian market. So, how is India still able to thrive? In this article, we will share the secrets behind achieving stock market growth.

Role of Domestic Investors

For a long time, foreign investors had control of the Indian stock market. Today, this figure has come down to 16%. Mutual funds, insurers, and individual investors are filling the gap created by foreign investors.

Many investors just automate their deposits into mutual funds and let the market play its role in bringing the profit. Is there any other choice? No! Domestic investors are pushing the market growth, and the coming times are going to stay in favor of the Indian economy.

Not very long ago, the typical Indian saver would put money into a fixed deposit, purchase a small bit of gold, or perhaps invest in real estate if the family budget permitted it. Stocks seemed like a casino, risky and daunting.

But something shifted post-pandemic. Indians sitting at home with smartphones and access to investment apps started posing a new set of questions:

• Why am I only getting 2–3% interest when inflation is devouring more than that?
• Why should I wait eight years to lay hands on my own money when the market provides flexibility and growth?

This revolution from scarcity mentality (“don’t lose what you have”) to growth mentality (“make your money work for you”) has been nothing short of revolutionary. It is symptomatic of a deeper psychological shift: individuals are no longer saving to survive, but investing to thrive.

The Rise of Systematic Trust

Part of the reason this trend has remained so durable is automation. Investors aren’t stuck to their television sets watching CNBC or reading every communication from international fund managers. Rather, they are creating systematic investment plans (SIPs) and allowing compounding to do its silent magic.

This is an indicator of a fundamental principle of money psychology: consistency trumps timing. While foreign institutional investors jump in and out based on international breeze, Indian families are discovering the virtue of holding on. It’s a change in mindset that’s long-term — from following headlines to believing a system.

Stories Behind the Numbers

Consider the example of Tathagata Banerjee, a professor of literature from Kolkata. His savings were primarily in government bonds until 2020. When Covid-19 struck and markets plunged, he did not act in panic. What he did is the oldest principle of investment — “buy low, sell high.”

In a year, his portfolio had increased by 40%. Today, he earns around 21–22% per annum, much more than his savings account could have provided. More significantly, he’s found what psychologists refer to as loss aversion in reverse: rather than being afraid of volatility, he now dreads missing out on opportunity.

Financialization of Indian Savings

Economists term this as the financialization of savings — money previously tied up in real estate or gold is now pouring into stock and mutual funds. But on a psychological note, it’s also about identity. To invest in the stock market is to be a part of India’s growth story. It’s not only about safeguarding wealth anymore, but about belonging to an ascending nation. Even when tariffs slam exporters, investors see resilience in listed companies and bet on long-term growth.

The Psychology of Resilience

A foreign company is volatile. It exists when China appears to be in flames or when trade wars become a threat. But domestic investors are reflecting a new type of resilience — a mix of:

• Optimism bias: being pragmatic that India’s growth tale will persist.
• Anchoring: concentrating on consistent SIP investment instead of daily fluctuations.
• Self-efficacy: the sense of “I am capable of this, even using just a smartphone app

It’s this psychology that can account for why the Sensex and Nifty hardly flinched when U.S. tariffs struck last month.

What does this mean for the Future?

With more than 200 million brokerage accounts in India today, one per seven Indians, the ride has only started. The wealth mentality is spreading at a faster pace than ever. And unlike foreign investors who are seeking yield, Indian investors are driven by something more profound: a desire for their money to grow along with their country.

Prime Minister Modi might speak of purchasing Indian merchandise out of national pride, but to a lot of small investors, the motive is simpler: common sense. Why pursue saturated foreign markets when India’s narrative is yet to be written

Final Thought

Tariffs, trade wars, and foreign exits might be the headlines. But beneath it all, India’s middle-class investors are slowly redefining the market rules. Their psyche, one that is based on patience, faith in growth, and confidence, could be the country’s best economic defense. Because ultimately, the strongest market force isn’t policy or politics. It’s the attitude of millions who’ve decided to let their money grow, not just collect dust.

Reference: https://www.nytimes.com/2025/09/08/business/india-stocks-investors-trump.html