Raamdeo Agrawal, Chairman and Co-founder of Motilal Oswal Financial Services, asserts that his renowned "buy right, sit tight" investment philosophy continues to be effective for the Indian equity market. However, he emphasizes that contemporary investors require significantly more patience to navigate the current environment.
Speaking to Business Today, Agrawal acknowledged the prevailing "chaos" and "noise" that can make a long-term perspective challenging. Despite these headwinds, he maintains a bullish outlook on India's enduring potential. "Businesses are still the same, but just the noise around that is so much that taking a long-term view becomes very difficult. The strategy works, but you need a lot more patience," he stated.
India's Long-Term Potential and Market Volatility
Agrawal highlighted India's consistent track record of generating multibagger stocks and anticipates this trend will persist over the coming decades. He likens recent uncertain periods, such as geopolitical conflicts, to "potholes" that the market will encounter. Yet, he believes peaceful times eventually return, leaving the Indian economy on a strong footing, supported by robust GDP growth of 7.8% and credit growth of 17%.
The past 12-18 months have seen considerable volatility, marked by US tariff uncertainties and the recent US-Iran conflict. Foreign portfolio investors (FPIs) have been significant sellers of Indian equity, offloading Rs 2.88 lakh crore in 2026 (up to June 15) and Rs 1.66 lakh crore in 2025.
Reasons for FII Sell-Off and Policy Responses
Agrawal explained that the FPI sell-off isn't solely due to a lack of confidence in India but rather the emergence of more attractive and often cheaper opportunities in other global markets, particularly in areas like artificial intelligence. Additionally, the sharp depreciation of the Indian rupee against the US dollar has eroded FII returns, further incentivizing their exits.
In response to these outflows, the Reserve Bank of India (RBI) and the central government have introduced several measures to bolster foreign fund inflows. These include opening a special window for banks to mop up FCNR(B) deposits and exempting FIIs from capital gains tax on investments in government securities (G-Secs). The definition of overseas individual investors eligible for the foreign portfolio investor scheme has also been broadened.
Optimistic Outlook on Rupee Stabilization and Inflows
Agrawal views the capital gains tax exemption for FIIs investing in G-Secs as a "gigantic move." He expressed confidence that once the rupee stabilizes and the "fear of rapid devaluation goes away," foreign capital will "gush in" back into India. The rupee, after hitting a record low of nearly 97 against the dollar in May, has shown signs of recovery, closing at approximately 94.55 on June 16, 2026. Data from NSDL indicates FPIs have already invested over Rs 25,000 crore in Indian bonds in June alone.
Agrawal advises investors to maintain conviction in their holdings during unpredictable times and resist panic selling, asserting that such short-term fluctuations become insignificant over a ten-year horizon.