Samvat 2082: Key risks that could test Indian stock markets resilience

Indian equities enter Samvat 2082 amid risks from US tariffs, high valuations, FII outflows, fiscal pressures, and geopolitical tensions, even as earnings recovery offers long-term optimism

Risks for Indian stock markets: As Dalal Street ushers in Samvat 2082 on October 21, 2025, analysts remain optimistic around India's structural growth story, backed by policy reforms, benign inflation, and expectations of a rebound in earnings growth in the second half of the current financial year 2025-26 (FY26). 

 

Yet, they caution that a confluence of global and domestic risks could test market sentiment in the months ahead.

 

From geopolitical uncertainties and US tariff escalations to valuation pressures and fiscal concerns, several factors could shape the trajectory of Indian equities in the new Samvat year. 

 

 

What are the key risks for the Indian stock markets in Samvat 2082?

 

US tariffs and trade risks

 

According to Devarsh Vakil, Head of Prime Research at HDFC Securities, geopolitical concerns with neighbouring countries and renewed trade tensions with the US are among the biggest overhangs for Indian markets.

 

"Any re-escalation in US' protectionist trade policy may adversely impact Indian equities. The full impact of the punitive tariffs announced by the US on growth will only be visible next year," Vakil cautioned.

 

Umesh Gupta, Head – PMS, Ambit Global Private Client, too, added that the US’ recent tariff hikes could weigh heavily on India’s export-driven sectors.

 

"The US' total duties on Indian imports now stand at 50 per cent for a wide basket of goods. These tariffs are likely to cut India’s gross domestic product (GDP) by 0.3–0.5 per cent and result in roughly $4–5 billion of export losses," he said.

 

Gupta noted that sectors such as textiles and chemicals remain vulnerable. 

 

Geopolitical tensions

According to analysts, the India–Pakistan conflict, earlier in 2025, disrupted trade and supply chains. If there remains persistent worries around escalation, it could dampen foreign investment flows and heighten market volatility.

 

Valuation concerns amid earnings slowdown

 

Despite recent corrections, valuations of Indian stock markets remain elevated compared to global peers. Devarsh Vakil of HDFC Securities highlighted that the MSCI India Index trades at a CY26E price-to-earnings (P/E) of 20x, representing a 65 per cent premium to MSCI Emerging Markets. This is still above the long-term average.

 

"Corporate earnings have been lacklustre with Nifty 50 companies delivering only 8 per cent growth -- below expectations. Valuation concerns will persist if Indian equities continue to trade at premium levels," Vakil noted.

 

However, Manish Sonthalia, director and CIO at Emkay Investment Managers, believes overvaluation may not pose a challenge if earnings recovery materialises.

 

"Geopolitical risks and earnings growth are the major risks. I don’t think overvaluation is a risk any longer if consensus earnings growth comes through. Markets are already pricing in the most pessimistic scenario. Things should only get better next Diwali," Sonthalia said.

 

Fiscal and currency pressures

 

On the domestic front, fiscal slippage and rupee volatility are key variables to watch. Vakil noted that the fiscal deficit through April-August has widened to nearly 38 per cent of the full-year target, even as the rupee has seen episodic pressure.

 

While benign inflation gives the Reserve Bank of India (RBI) breathing room, any external shocks or prolonged foreign institutional outflows could intensify currency weakness and imported inflation risks.

 

Growth slowdown

 

According to Ashwin Patil, Head of Fundamental Research at LKP Securities, a weaker monsoon and its effect on agriculture output could compound the impact from the new US tariffs which are expected to shave off up to 1.5 per cent of India's GDP.

 

He also flagged that the expansion of artificial intelligence (AI) may disrupt traditional job markets, leading to higher unemployment and slower consumption growth.

 

Global liquidity and FII flows

 

A mix of tight global liquidity, US policy uncertainty, and protectionist moves led to foreign investors selling over ₹1 trillion of Indian equities in Samvat 2081. 

 

“While Indian equities often outperform on a risk-adjusted basis, sentiment remains subdued. As India continues to trade at a premium to global peers, it is susceptible to corrections if earnings growth stumbles or sentiment sours,” he said.

 

Analysts underscored that a halt in FII selling is crucial for the markets’ stability in the coming quarters.

 

Reform fatigue

 

While analysts laud the governments efforts to revive consumption, they warned that if the consumption push fizzles out too soon, demand and earnings growth may fall short of expectations.