HSBC Labels India a Prime Investment Hub, Predicts Continued Lead as Fastest-Growing Major Economy

India remains a global investment destination of choice in the third quarter of 2025, underpinned by good consumer demand, benign trade conditions, and an accommodative monetary policy, as per HSBC Global Private Banking's latest investment forecast published on Tuesday.

India's GDP is expected to grow at 6.2% this year, making it the world's fastest-growing large economy, the report forecasted.

In its report, HSBC was in a "mild overweight" position on Indian equities and local currency bonds. In the space of equities, the bank has favored large-cap shares and domestic economy-linked sectors such as financials, healthcare, and industrials.

"India's economic resilience, supported by robust domestic consumption, benign trade dynamics, and easy monetary policy, positions the country for an encouraging second half of 2025," the report noted.

Even with an unpredictable year so far for markets around the world, HSBC called on investors to be ready for ongoing volatility with regular US policy shifts. The report underscored the need to remain flexible, even in uncertain situations.

Whilst we accept the high level of global uncertainty, we still project India's GDP growth at 6.2 per cent in 2025 and it would be the fastest growing major economy," said James Cheo, Chief Investment Officer for South East Asia and India, HSBC Global Private Banking and Premier Wealth.

Strong domestic investor appetite and fresh interest from foreign investors are also adding to a favorable technical setup for Indian markets, added Cheo.

The report presents four main investment priorities for Q3 2025: continued diversified exposure to equities, playing up opportunities around AI adoption, active management of currency-related risks, and playing up Asia's domestic growth potential.

HSBC recommended creating resilient investment portfolios that can weather geopolitical and market-related surprises.

"Although we anticipate lower US growth this year, the economy shouldn't slip into recession or stagflation. Expectations of earnings growth have already been cut back, and valuations are fair at about historical levels," said Willem Sels, HSBC Global Private Banking and Premier Wealth Global Chief Investment Officer.