Sharma listed out two reasons for the underperformance of Indian markets attributing the first reason to AI trade as the dominant global driver which he feels has not obviously favoured India.

“The big trade in the world in the last year has been the AI trade and India has been seen as a bit of a loser in this,” he said. “There is a feeling that AI is going to take over a lot of jobs. It’s going to make it much more difficult for countries to climb up the development ladder because so many jobs are going to be replaced by AI that could have been done by a lot of mid-level workers, whether it is BPO or other such industries.”

Second, he pointed to geopolitics and the trade tussle between India and the United States of America.

“The ongoing trade dispute with the US and the shifting tenor of US-China ties have altered India’s positioning,” he stated.

“At one point in time, India was seen to be the favoured ally of the US, which is the ‘so-called indispensable country that no nation can do without’, and now all of a sudden we find ourselves in a bit of a box,” Sharma said.

“The relations between the US and China seem to have improved from a very low point a year ago, and as far as India is concerned, it is no longer seen as the indispensable nation.”