How can an investor protect his savings in India amid stock market volatility

Khaleej Times

5 days ago

Question: The Indian capital market has been on a roller coaster ride during the past few weeks as a result of the tariff war. How should an investor protect his savings during these turbulent times?
ANSWER: Generally investors tend to hold back their investments during periods of high volatility in the equity markets. In such a scenario, investors having liquid cash have the option to go in for a Systematic Transfer Plan. This is done by transferring from a liquid or overnight fund to an equity fund over a period of time when the market settles down. The investor may decide on the frequency of transfer as he may be advised by his wealth managers. The benefit of using the STP route is that the money remains invested in a liquid fund which fetches a return on investment that is higher than the interest earned on a savings bank account.
Another avenue for investment is in liquid Exchange Traded Funds where the surplus cash is parked. Over the last year, assets under management in liquid ETFs have risen 31 per cent from Rs172 billion to around Rs235 billion. The growing popularity of liquid ETFs has resulted in new launches of such funds especially by well-known financial services companies. As a debt product, liquid ETFs are not subject to the securities transaction tax and, in order to encourage investors to use this avenue for investment, several brokers waive their brokerage charges on buying and selling of ETFs. ETFs primarily invest in overnight instruments including Government securities and treasury bills, making them risk free and high on liquidity.
Question: My son is specialising in technologies pertaining to AI. As I have a fairly comfortable home in India, he wants to return and look for a suitable opening in this field. Are there opportunities for leadership roles?
ANSWER: AI leadership roles are in great demand in India and there was a significant jump in hiring in this space during the last one year. This increase correlates with the shift from pilot AI initiatives to scaled enterprise adoption, especially in healthcare and retail where data driven transformation is accelerating. The demand is driven by firms across IT, consulting, ecommerce, fintech, deeptech and GenAI focussed startups which are setting up AI centres of excellence in India. Companies are on a recruitment spree in relation to leadership talent for consulting-led engagements and for creating industry-specific AI solutions.
The compensation packages are exceptionally superior, especially in Global Capability Centres (GCCs) set up by multinational companies in India. The demand for this talent is expected to double in the current financial year owing to rising strategic significance. Some business leaders refer to this as the new AI economy offering services across AI advisory, AI engineering and AI solutions. Leading companies have been hiring talent for positions which drive innovation. The objective of most companies is to nurture expertise across the entire AI value chain and drive AI-led reinvention for clients across various sectors.
Question: The fast moving consumer goods industry has recorded a marginal growth according to research analysts. Will this have a dampening effect on the overall growth projections of the Indian economy for the current fiscal year 2025-26?
ANSWER: Products manufactured by medium and small enterprises drove FMCG growth for the quarter ended 31st March, 2025. Rural markets outpaced urban centres, growing four times faster. To put it in perspective, rural markets grew by 8.4 per cent year on year, contributing almost 40 per cent of the overall consumer goods sold in India. Small manufacturers grew twice as fast than the overall FMCG market mainly on account of changing market dynamics and higher purchasing power in the hands of the rural masses. Inflation is coming down gradually and therefore consumption is expected to pick up in the current financial year 2025-26.
According to leading FMCG companies like Nestle, Hindustan Unilever, Dabur and others, urban demand is likely to pick up in the third and fourth quarters of this financial year. The reduction in income tax outgo for the middle class tax payers is expected to give a further boost to consumption. Therefore, the GDP growth forecast of 6.4-6.6 per cent is considered to be realistic, given the fact that trade and exports are likely to increase in the next nine months of the current financial year as a result of bilateral trade treaties entered into by India with the United Kingdom and in the near future with the European Union and the United States of America.
The writer is a practising lawyer, specialising in corporate and fiscal laws of India.