India to sustain high growth despite global headwinds, says GlassRatner expert
Synopsis
Despite FII outflows, AI-driven liquidity shifts, and an unresolved US-Iran conflict, GlassRatner's Seth R. Freeman says India's high-growth trajectory will hold — and Goldman Sachs has backed that view by upgrading India's 2026 GDP forecast to 6.8%, citing the US-Iran peace deal and lower oil prices.
Key Takeaways
Freeman of GlassRatner Advisory & Capital Group says India will remain among the world's fastest-growing major economies despite global headwinds.
Freeman favours healthcare and automobiles as the best-positioned Indian sectors for long-term growth.
He warned that the US-Iran conflict could disrupt fertiliser supply and push food prices higher globally .
Goldman Sachs raised India's 2026 GDP growth forecast to 6.8% (from 6.5%) and its FY27 forecast by 40 basis points to 6.5% .
Freeman attributed the semiconductor stock correction to elevated valuations and supply constraints, not a structural downturn.
Domestic investors have cushioned FII outflows this year; overseas capital is expected to return as valuations become attractive.
India is poised to remain among the world's fastest-growing major economies even as geopolitical tensions, uncertainty over artificial intelligence (AI) spending, and sustained foreign institutional investor (FII) outflows weigh on sentiment, according to Seth R. Freeman, Senior Managing Director at GlassRatner Advisory & Capital Group. Freeman's assessment, shared on 27 June, frames recent underperformance in Indian equities as a consequence of extraordinary global disruptions rather than any deterioration in domestic fundamentals.
India's Growth Trajectory Remains Intact
Freeman argued that the current volatility in Indian markets is externally driven. 'There is a lot of volatility caused by the war and AI-related investments are soaking up global liquidity,' he said, adding that India continues to achieve high growth and that this trajectory will be sustained. He pointed out that domestic investors have played a crucial role in cushioning the blow from FII outflows this year, and predicted that overseas capital would return once valuations reach sufficiently attractive levels.
Sectors Freeman Favours: Healthcare and Automobiles
Among Indian market sectors, Freeman remains constructive on healthcare and automobiles, viewing both as well-positioned for long-term growth. His sector preference reflects confidence in India's consumption-driven demand story, even as global capital rotates toward AI-linked assets.
US-Iran Conflict and Commodity Risk
Freeman cautioned that periodic flare-ups related to the United States-Iran conflict should be expected, and investors should not anticipate a quick resolution. He warned that supply disruptions linked to the conflict could reduce the availability of fertilisers, potentially driving food prices higher globally. This adds a commodity-risk dimension to India's inflation outlook that policymakers and investors will need to monitor closely.
AI Investments Reshaping Global Capital Flows
Artificial intelligence emerged as a central theme in Freeman's analysis. He noted that massive investments are being channelled into AI infrastructure, data centres, and semiconductor manufacturing worldwide. However, he cautioned that returns on these investments could take several years to materialise. Freeman also dismissed concerns that the recent correction in semiconductor stocks signals a structural downturn, attributing the decline instead to elevated valuations and persistent supply constraints.
Goldman Sachs Raises India GDP Forecast
Goldman Sachs has independently raised its GDP growth forecast for India to 6.8 per cent for calendar year 2026, up from an earlier projection of 6.5 per cent, following the US-Iran peace deal that has contributed to lower global oil prices and eased supply chain disruptions. The investment bank also revised its FY27 GDP growth forecast upward by 40 basis points to 6.5 per cent. The dual upgrade from a major Wall Street institution lends further credence to the bullish case for India's medium-term economic outlook. With domestic demand resilient and global headwinds potentially easing, India's growth story appears durable — though the pace of FII return and the trajectory of the US-Iran situation will be critical variables to watch in the months ahead.
Point of View
But it papers over a structural tension: FII outflows have persisted long enough to test that thesis. The Goldman Sachs upgrade is meaningful, but it is partly a peace-dividend call on US-Iran — a geopolitical variable that Freeman himself says investors should not expect to resolve quickly. More critically, the AI liquidity drain is not a temporary blip; if global capital continues to concentrate in semiconductor and data-centre plays, emerging market re-rating timelines stretch further out. India's growth story remains intact, but the 'FII will return when valuations are attractive' argument has been made for three consecutive quarters now — patience in that thesis is wearing thin.
NationPress
27 Jun 2026
Frequently Asked Questions
Why does Seth R. Freeman believe India will sustain high growth despite global headwinds?
Freeman argues that recent underperformance in Indian equities reflects extraordinary global disruptions — including geopolitical tensions and AI-driven liquidity absorption — rather than any weakness in India's economic fundamentals. He notes that domestic investors have offset FII outflows and that India continues to achieve high growth, a trajectory he expects to be sustained.
What is Goldman Sachs's latest GDP growth forecast for India?
Goldman Sachs has raised India's GDP growth forecast to 6.8 per cent for calendar year 2026, up from 6.5 per cent, following the US-Iran peace deal that has lowered global oil prices and eased supply chain disruptions. It also upgraded the FY27 forecast by 40 basis points to 6.5 per cent.
Which Indian sectors does Freeman recommend for long-term investment?
Freeman remains constructive on healthcare and automobiles, viewing both sectors as well-positioned for long-term growth within the Indian market context.
How could the US-Iran conflict affect India?
Freeman cautioned that periodic flare-ups in the US-Iran conflict could disrupt fertiliser supply chains, potentially driving food prices higher globally. This poses an upside risk to India's inflation outlook and could complicate monetary policy decisions.
Why did semiconductor stocks correct, and is it a structural problem?
Freeman dismissed structural-downturn concerns, attributing the semiconductor stock correction to elevated valuations and persistent supply constraints rather than any fundamental demand collapse. He noted that returns on AI infrastructure investments could take several years to materialise.
