India's equity market has cooled significantly since late 2023, with weakened macro conditions and lacklustre domestic consumption driving a valuation decline relative to peers like China, though government stimulus efforts and long-term structural opportunities in sectors such as renewables, financials, and manufacturing maintain its appeal for selective investors despite near-term challenges. Key points India’s equity markets have cooled since late 2023, reversing a period of outperformance against broader emerging markets and China. India’s valuation premium has narrowed significantly, particularly versus China, as investors prioritize themes like AI and defence. Despite near-term challenges, India retains structural growth potential in sectors like power/electrification, financials, healthcare, and manufacturing.