India’s economic growth could outperform expectations in 2026, driven by strong momentum in banking, consumer, and IT sectors, according to Herald van der Linde, Chief Asia Equity Strategist at HSBC.

He noted that corporate earnings are likely to strengthen as profit margins improve, banks post healthier balance sheets, and foreign investors renew their focus on India. Many global investors see India as a reliable growth market amid uncertainty in other economies.

Key Highlights

• India’s 2026 growth to be driven by strong banking, consumer, and IT sector momentum
• HSBC strategist Herald van der Linde sees Indian equities poised for major rally

In banking and financial services, reforms, better asset quality, and rising credit demand are expected to support higher profitability. The consumer sector continues to expand due to increasing household incomes, urbanisation, and a shift toward organised retail. The IT sector, despite facing transformation pressures, remains well-positioned to benefit from demand for advanced digital solutions and global outsourcing.

Concerns about expensive valuations in Indian equities have eased as fundamentals improve and earnings catch up. HSBC believes that the Indian market offers attractive opportunities compared to its regional peers.

Van der Linde added that while global risks remain, India’s domestic growth story is gaining strength, offering a balanced risk-reward setup for investors.

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Overall, India’s stock market appears ready for its next growth phase. With solid performance in key sectors and rising investor confidence, the country could deliver one of the strongest equity market rallies in the region by 2026.