FY26: The worst fears came true

The financial year 2025-26 started on a disruptive note with President Trump announcing a hike/imposition of tariffs on most of the USA’s imports from 9^th April 2025. During the course of the year, the Trump administrations made several changes to the tariff policy, creating an environment of heightened uncertainty amongst trading partners of the US. India was one of the worst affected countries. Though the Supreme Court of the US ruled against Trump's tariff policy in February 2026, the uncertainty still remains.

The technological advancements in the sphere of artificial intelligence and advanced computing during the year also disrupted Indian equity markets, in more than one way. The IT services sector stocks suffered valuation de-rating on clouding of growth prospects. Foreign investors accelerated the shift of their portfolio from Indian equities (due to lack of meaningful AI or Advanced computing opportunities) to the markets like South Korea and the US.

The US and Israel coalition attacked Iran on 28^th February 2026. The war escalated materially in the following weeks and still continues. This war has disrupted global supply chains. Energy supplies are impaired and prices have spiked sharply. Several countries are reporting shortages of key raw materials. Manufacturers are staring at a summer of discontent. Consumers are struggling with shortages and higher prices.

I had written in my first post of FY26, “Financial Year 2024-25 (FY25), may be recorded in the annals of history as a watershed year for global politics, geopolitics, markets and the financial system. The events that occurred during the past twelve months have opened up significant possibilities for emergence of a new global order. Although the contours of the likely new global order are yet to begin taking a shape, it appears that fight for dominance over technology; endeavor to gain fiscal strength; interventionist democracy where the state exercises intensive control over citizens; and top priority to energy security would be four key characteristics of the new order.” (see here)

The actual scenario is playing out mostly on these lines only. Also, in my CY2026 outlook post, I had mentioned the following five key risks for 2026.

·         Sharp global growth slowdown

·         Unexpected inflation resurgence

·         Fiscal slippage or policy inconsistency

·         Geopolitical escalation impacting energy or trade

·         Financial system stress from isolated credit events

It appears that four out of these five risks have already materialized in the first quarter of 2026 itself. The financial year has ended with the markets still on edge.

Key highlights of FY26

·         The equity markets in India yielded negative returns for FY26, with Nifty returns being zero for the past two years (FY25-FY26). Indian bonds and currency markets were also notably weak and yielded negative returns for the FY26. FY26 was one of the worst years for INR. Precious metals were the notable outperformers for the year. Indian equities and currency were one of the worst performers globally.

·         Although the economy remained resilient, the corporate earnings failed to meet the expectations for the second consecutive year. The earnings disappointment came despite favorable monetary conditions; good monsoon, low inflation and recovery in rural demand.

·         Indian corporates raised a record Rs1.79 trillion from IPOs during FY26. Besides, Rs510bn through qualified institutional placements. The trend of corporate deleveraging continued.

·         Negative FPI flows also dominated the headlines. FY26 was one of the few years when FPIs were overall net sellers – accounting for the primary and secondary markets for both equity and debt.

·         The balance of power, in terms of equity ownership, continued to shift from the foreign portfolio investors (FPIs) to Indian household investors (Retail). The ownership of FPIs in the listed Indian equities fell to a 14 year low of ~16%; while retail investors’ ownership in listed Indian equities increased to a two decade high of ~25%.

·         Lending rates eased 50-75bps, lower than the policy rate cut of 100bps. RBI maintained comfortable liquidity through a variety of measures. Deposit rates were also lower by 60-65bps.

·         Globally, some notable financial market events in FY26 were – (i) sharp outperformance of Asian equities, especially South Korea and Japan; (ii) sharp rise in the Japanese bond yields; (iii) the Fed pausing after cutting 75bps during the year against the consensus expectation of another 50bps cut; and (iv) Gold (+49%) and Silver (+120%) rallied hard, while bitcoin prices fell ~20%.

·         Geopolitical tension that started with the Russian invasion of Ukraine in early 2022, and escalated with Israel raiding Palestinian territories in 2023, continued to rise in 2026 with intense war between the US & Israel coalition and Iran. A swift change of regime in Venezuela was another notable geopolitical event of FY26.

Stock markets – Worst year since FY20

The Benchmark Nifty50 ended FY26 at 22336.40, 5.1% lower yoy; making two return zero for Nifty. NSE Midcap 100 managed to end the year with marginal gains (+1.9%); while NSE Small cap 100 index (-5.5%) fell in tandem with Nifty. The overall market capitalization of the NSE was marginally higher (+0.1%) at Rs411.25 trillion; however, in USD terms the market capitalization was lower by 10% at US$4.34trn at end of FY26 vs US$4.8trn a year ago.

·         The popular investment themes of FY25 (Defense, clean energy, roads, railways, etc.) underperformed in FY26.

·         PSU Banks, Metals, Healthcare, Auto, and Energy were the top performing sectors. Realty, IT Services, FMCG, Private Banks, and Services were the notable underperformers.

·         International equity funds and Gold ETFs and Silver ETFs, delivered strong performance, sharply outperforming the equity markets

·         Most mutual funds managed to outperform Nifty 50 by a decent margin.

·         Nifty 50 valuations are now closer to long term averages with one year forward PER at ~20x, Price to Book at ~3.7x, Market Cap to GDP at 119%, and the spread between Bond yield and Earning yield has narrowed in recent months.

·         Long-term (5yr rolling CAGR) Nifty returns collapsed to 8.7% at the end of FY26, lowest since FY20.

Earnings growth – continues to lose momentum

Nifty EPS growth disappointed in FY26 also, after recording almost no growth in FY25. FY27e earning growth is also likely to be in mid-single digits. The earnings in the five years FY22-FY26e have grown at 15% CAGR.

FPIs secondary market flows negative for unprecedented third consecutive year

Though the overall institutional flows in the secondary markets remained positive consistently, persistent FPI outflows are becoming a cause of worry. In FY26 FPIs were net sellers in the secondary market to the tune of Rs 2.5 trn, while DII net bought Rs8.5trn, resulting in a record net institutional inflow of Rs5.98trn. FPIs have been net sellers in the Indian secondary market for three consecutive years (FY24-FY26) now, resulting in a net 3 year outflow of Rs6.2trn.

Debt and currency – distinctly weak

INR was one of the worst global currencies in the world, losing 8.4% against USD, 13.3% against GBP, 17.7% against EUR and 7.5% against JPY. The yield curve lifted higher and steepened sharply. The benchmark yields ended higher at 6.96%) vs 6.58% at end of FY25) despite monetary easing. Lending and deposit rates were lower.

Commodities – A buoyant year

The year FY26 was a buoyant year for commodities. Precious metals, energy, soft commodities and industrial metals ended mostly higher for the year. USD weakness, tariff war and geopolitical conflicts impacted the supply chains and cost curves. The commodity prices were thus higher despite a marked slowdown in Chinese and European economies. Silver (+120%), Gold (+49%), WTI Crude (+43%), Aluminum (+37%), Copper (+27%), Wheat (+14%) were some notable gainers. Sugar (-20%) was a notable loser.

·         Gold and Silver prices have shown a declining trend in the last couple of months.

·         Soft commodity prices are mostly back to pre-Ukraine war levels or even lower.

·         Natural Gas prices are at 2021 levels, despite sharp rise in crude oil prices and supply disruptions.

Cryptos – A bad year

FY26 was a bad year for cryptocurrencies. Bitcoin, the largest and most popular cryptocurrency, ended the year with over 20% loss, while several smaller cryptocurrencies ended much lower. Cryptocurrencies however continued to gain wider acceptance from governments, regulators, financial institutions, market participants, and investors. More and more governments are now inclined to view crypto as a legitimate asset.

Economic Growth – a widespread slowdown

Both the engines of global growth in the post Global Financial Crisis (GFC) era, viz., China and India, are now experiencing some fatigue. Though the Indian economy continues to show resilience, the geopolitical conditions are indicating a widespread slowdown. With large European economies like Germany, France and UK barely growing, Japan and Latin American economies slowing and the US economy also showing distinct signs of an impending slowdown in 2025, the global economic growth has certainly entered a slow lane in FY26.

Gold and Silver – Raging rivers, stay safe

Heightened volatility in the prices of gold and silver in recent days has tempered the rampant euphoria to some extent. Silver traders, in particular, have grown more cautious following such extreme volatility, with trillions wiped from market caps in a single session.

The lingering question is whether this represents a brief pause in the ongoing bull market for precious metals, as many optimists claimed until recently, or if the party has ended, and the cows are now ready to return home.

I have long held firm views on investing in precious metals, which I have shared with readers on multiple occasions. I am pleased to reiterate and expand upon them here, incorporating recent market developments for clarity.

In my view:

•      Gold and silver remain deeply embedded in our culture, religion, and traditions. Purchases for social, cultural, religious, or traditional obligations should typically be viewed as consumption rather than investment.

Of course, in times of severe financial hardship, these assets can be liquidated for cash, functioning as a form of insurance or hedge. However, under ordinary circumstances, they fall short of qualifying as true "investments" due to their lack of intrinsic yield or productive capacity, unlike equities or bonds.

•      The latest arguments supporting gold and silver as investments often fail scrutiny. For instance, the case for soaring gold prices hinges largely on expectations of a weakening and diminishing US dollar (USD). The two main drivers cited are (i) erosion of its dominance in global trade and finance, and (ii) the US government's unsustainable debt burden, now exceeding $35 trillion.

If that be true, the USD's hegemony could fracture through de-dollarization efforts, such as those discussed in BRICS forums. Yet, if the USD loses its reserve status, a divided global landscape is unlikely to agree on a single alternative—or even a basket of fiat currencies. The uneven distribution of gold reserves across nations makes a gold-backed system improbable as a universal replacement.

Furthermore, should the USD weaken significantly, commodity pricing (including gold) might shift away from dollars toward stronger currencies like the JPY, EUR, CNY, GBP, or AUD, potentially driving sharply lower nominal prices for these assets.

Second, a depreciated USD could enhance US export competitiveness, incentivizing reshoring of manufacturing and leaving excess capacity in Asia—a scenario that proved massively disinflationary during past trade shifts, as seen in the 2010s.

Third, if the US attempts to inflate its way out of debt by devaluing the USD, funding its escalating fiscal deficits becomes precarious. Investors would shy away from depreciating US Treasuries (USTs), forcing austerity measures. Such fiscal tightening could emerge as the most potent disinflationary force of the 21st century, as evidenced by recent market reactions to hawkish Fed nominations.

In this disinflationary environment holding gold as an inflation or currency hedge loses much of its appeal, as safe-haven flows reverse during deleveraging events.

•      The rationale for silver's upward trajectory is equally unpersuasive. A core economic tenet holds that industrial commodities are predominantly price takers: demand for end products dictates raw material prices, not the reverse.

A 250% surge in silver prices—anticipating future industrial demand years ahead—defies this logic, especially when recent crashes reveal overleveraged speculation rather than fundamentals.

Moreover, economic historians recall that silver once rivaled or surpassed gold as a monetary metal for decades, with demand far exceeding today's levels. If heightened industrial use (e.g., in solar or EVs) does materialize, it wouldn't be unprecedented. Recall the repeatedly hyped "peak oil" narrative, peddled until 2009 but now obsolete due to technological advancements like shale extraction—similar innovations could temper silver's supply constraints.

•      Regarding the recent sharp upmove and subsequent collapses in gold and silver prices, I regard them as raging rivers swollen by speculative floods. Traders can choose to dive in and ride the current or wisely observe from the banks. Attempting to navigate with full control, as if in a sturdy boat, is illusory.

History shows that in nearly every precious metal bull cycle—from the 1980 silver bubble to the 2011 peak—most participants suffer losses, while only a fortunate few emerge profitable. The 2025-2026 euphoria, fueled by geopolitical hype and retail frenzy, followed by trillion-dollar wipeouts, proves this time is no different.

Navigating Volatility Without Losing the Plot

Over the past few weeks, Indian financial markets have begun to show unmistakable signs of stress. While the benchmark indices such as the Nifty and Sensex have largely managed to hold their ground, the underlying market tone tells a very different story. A significant number of small- and mid-cap stocks have undergone sharp price corrections, exposing the fragility beneath what still appears, on the surface, to be a resilient market.

This divergence between benchmark indices and broader market performance is often an early signal of rising investor discomfort. And this time, the discomfort has morphed into something closer to panic.

The anatomy of the current panic

The most pronounced damage has been in momentum-driven stocks, many of which were heavily owned by non-institutional investors. As liquidity dried up, these stocks witnessed not just steep price declines but also an absence of buyers, exacerbating the fall. This is a familiar pattern: assets that rise rapidly on optimism and excess liquidity tend to fall hardest when sentiment turns.

Importantly, this correction has not been driven by a single adverse event. Rather, it is the cumulative effect of stretched valuations, crowded positioning, and a gradual shift in the global macro environment. When markets are priced for perfection, even marginal disappointments can trigger outsized reactions.

What has added to investor unease is that equities are not the only asset class struggling.

Bonds offer little shelter

Traditionally, balanced portfolios rely on fixed income to cushion equity volatility. However, over the past three months, government bonds have delivered negligible—or in some cases negative—returns. Rising global yields, persistent inflation concerns, and uncertainty around future rate trajectories have reduced the defensive appeal of bonds.

As a result, investors holding diversified portfolios have found little comfort on either side of the asset allocation spectrum. When both equities and bonds underperform simultaneously, investor confidence tends to weaken disproportionately, often leading to emotionally driven decisions.

Currency weakness adds another layer of anxiety

Adding to the market nervousness has been a sharp depreciation of the Indian rupee against most global currencies. A weaker balance of payments position in Q3FY26, a strengthening US dollar, and the likelihood of limited intervention by the Reserve Bank of India (RBI) have all contributed to the rupee’s decline.

What stands out, however, is the magnitude of depreciation against the Euro and the British Pound, which has been far steeper than against the US Dollar. From a structural perspective, this has a silver lining: it improves export competitiveness and encourages diversification of trade toward the UK and European markets.

Yet, currency weakness is a double-edged sword. If global commodity prices firm up, imported inflation could rise, complicating the domestic inflation outlook and constraining policy flexibility. Markets, which are forward-looking by nature, tend to price in these risks well before they materialize in economic data.

Flight to gold: safety or misallocation?

In periods of uncertainty, investors instinctively gravitate toward perceived safe havens. This time has been no different. Precious metals—particularly gold—have seen a surge in demand. Gold ETFs in India have recorded record inflows over the past couple of months, even as flows into equity and debt mutual funds have slowed materially.

While gold certainly has a role in portfolio diversification, the scale and speed of these inflows raise concerns. When fear and greed operate simultaneously, investors often over-allocate to assets that have recently performed well, rather than those that best serve long-term objectives.

This behaviour risks creating serious asset misallocation at the household level. Chasing gold after a sharp run-up, while cutting exposure to equities following a correction, can materially impair medium- to long-term returns. History suggests that such shifts, driven by emotion rather than strategy, rarely end well.

A resetting global order and the case for discipline

There is little doubt that the global economic and geopolitical order is undergoing a reset. Supply chains are being reconfigured, monetary policy frameworks are evolving, and geopolitical risks are now a permanent feature rather than a temporary disruption. In such an environment, market volatility is not an exception—it is the norm.

However, heightened volatility does not automatically imply poor long-term outcomes for investors. In fact, periods of uncertainty often lay the groundwork for future return opportunities. The key determinant of success is not market timing, but behavioural discipline.

At times like these, investors must resist the temptation to respond reflexively to short-term market moves. Selling risk assets after sharp corrections, abandoning asset allocation frameworks, or making concentrated bets on “safe” assets can do more damage than the market volatility itself.

Asset allocation: The only free lunch still available

The importance of adhering to a well-thought-out asset allocation strategy cannot be overstated. Asset allocation is not designed to maximise returns in any single year; it is meant to ensure that portfolios remain aligned with risk tolerance, liquidity needs, and long-term financial goals across market cycles.

Rebalancing—gradually and systematically—becomes especially important during volatile phases. Corrections in equities, particularly in quality segments, should be viewed through the lens of long-term capital allocation rather than short-term performance anxiety. Similarly, fixed income and gold allocations should be maintained at strategic levels, not tactically inflated based on fear.

Last words

Market panic is rarely caused by one event. It is usually the result of accumulated excesses meeting an inflection point. The recent correction in Indian markets, weakness in bonds, currency depreciation, and rush toward gold are all manifestations of this process.

For investors, the challenge is not to predict the next market move, but to avoid self-inflicted wounds. The global environment may remain turbulent, and volatility may persist longer than expected. But history consistently rewards those who remain disciplined, diversified, and aligned with their long-term strategy.

In uncertain times, restraint is not inaction—it is a conscious, rational choice. And more often than not, it is this choice that separates successful investors from the rest.

1HFY26 – India shackled

The first half of the financial year FY26 has been good for financial and commodity markets in general. Despite elevated geopolitical concerns, renewed trade war, slowing growth in major economies and emerging deflationary pressures, stock market, crypto assets, and precious metals, and industrial metals performed rather well. Energy and soft commodity prices were lower, indicating good price control. The global central bankers accordingly remained on the easing path.

India however was an outlier in the global context. Indian equities, currency and bond markets were one of the worst performers globally. South Koren equities were the best performing equities in 1HFY26. Chinese and German equities were other notable outperformers. Equity indices of the US, Japan, and the UK also recorded strong gains.

The most notable feature of global markets was the sharp rally in precious metal. The central bankers across emerging markets accelerated their gold accumulation, in view of the geopolitical developments and trade tensions. Silver also joined the rally in the past few months.

India performance – 1HFY26

Indian markets were one of the worst performers globally; sharply underperforming the peers. A short war with Pakistan, several punitive actions (tantamounting to virtual economic sanctions) by the US, slowing earnings growth amidst lagging consumer and investment demand, and persistent selling by the foreign investors weighed heavily on Indian equities and INR. The bond market was also sluggish, with the yield curve steepening. The efforts to stimulate demand by allowing income-tax and GST concessions have so far not yielded the desired results. Regulatory measures to curb excessive speculation in the market impacted overall volumes and level of activity.

The key highlights of the India market performance could be listed as follows:

·         The benchmark Nifty50 gained 4.6% during 1HFY26; while the Midcap (+9.4%) and Small Cap (+9.1%) did much better. Consequently, overall market breadth was positive.

·         Most of the market gains came in 1QFY26, prior to US penal tariffs coming into effect from July 2025. However, four out of six months yielded positive results.

·         The total market capitalization of the NSE is higher by ~9.2%; much more than gains in the benchmark indices – implying that stronger gains have occurred in the broader market.

·         PSU Banks, Metals and Consumer discretionary, were the top outperforming sector. Media, IT Services, pharma, Realty, FMCG, and private banks were notable underperformers.

·         Institutional flows to the secondary equity markets were positive for all six months. 1HFY26 witnessed a total flow of ~INR3154bn, despite net FPI outflow of ~Rs684bn. The correlation of institutional flows with Nifty returns was average (~56%).

·         The bond and currency markets were particularly weak in the 1HFY26. INR lost materially against most major currencies, e.g., GBPINR (-10%), EURINR (-14.6%), JPYINR (-9%) and USDINR (-3.6%). Benchmark yields are higher by 1.5%, despite 75bps cut by RBI and strict control over fiscal deficit. Lending and deposit rates were lower by ~50bps. Call rates are lower by 50-75bps.

·         The overall Indian yield curve shifted higher and steepened. Sharply.

·         The economic growth for FY26 is expected to remain flat at 6.5% (same as FY25). Fiscal balance is expected to be better with FY26BE fiscal deficit projected at 4.4% (vs FY25RE at 4.8%).

·         CPI inflation has eased significantly, averaging below 2% in the 2QFY26, much below the RBI tolerance band. Though RBI expects the inflation to pick up in 4QFY26, professional forecasters are predicting it to stay lower than 4%.

·         Corporate performance in 1QFY26 has been slightly better than the modest estimates, but signs of long-term earning trajectory slowing down are conspicuous.

FY25 – All’s well that ends well

Financial Year 2024-25 (FY25), may be recorded in the annals of history as a watershed year for global politics, geopolitics, markets and the financial system. The events that occurred during the past twelve months have opened up significant possibilities for emergence of a new global order. Although the contours of the likely new global order are yet to begin taking a shape, it appears that fight for dominance over technology; endeavor to gain fiscal strength; interventionist democracy where the state exercises intensive control over citizens; and top priority to energy security would be four key characteristics of the new order.

The markets began to take cognizance of the broader developments and oscillated wildly between the extremes of greed and fear during the year. However, thankfully, markets managed to close the year on a rather satisfactory note. Most asset classes – equity, bonds, precious metals, base metals and real estate yielded decent returns for the year. Moreover, as we begin the new financial year (FY26), some of the key concerns, e.g., wider trade conflicts, geopolitical escalations, and fiscal implosions have peaked and showing some early signs of easing.

In India, the economic growth returned to the normal pre-Covid trajectory, as the base effect of FY20 and FY21 low growth tapered off, and external challenges mounted. Equity markets settled close to their long-term average valuations, after witnessing one round each of euphoria and despondency. Bond markets and INR have also managed to end the year on a rather optimistic note.

The following are some of the highlights of the performance during FY25.

Equity Markets

The Indian equity market managed to end the year in positive territory, despite showing negative in six out of twelve months. Indian equities underperformed the global peers. The benchmark Nifty yielded a return of ~5% (3% in USD terms), which was in line with the US markets (S&P500 +8%), and Europe (Stoxx600 +5%, DAX +21%) but much lower than China (Hang Seng +38%, Shanghai Composite +9%). Asian markets, ex China, were mostly negative, with Japan (Nikkei225 -10%), Indonesia (IDX-10%), Korea (KOSPI -10%) and Singapore (SET -15%) ending the year with decent cuts. The valuation premium of Indian markets to the other emerging markets therefore remained elevated.

Banks saved the day for Indian benchmark indices

The benchmark Nifty (+5.3%) performed in line with broader markets (NSE500 +5.4%, Smallcap 100 +5.4%); though midcap stock did somewhat better (Midcap100 +7.5%). The gains in benchmark indices were mostly led by banks (Nifty Bank +9.3%). Overall market cap of NSE was higher by 6.9%, explained by many new listings and outperformance of midcap stocks.

Sector-wise, Financials, Services, Private Banks, Pharma and Metals were top outperformers. Media, IT Services, PSU Banks, Realty, FMCG, Auto, Infra and Commodities were notable underperformers. Micro-sector-wise, Ship builders and EMS were outstanding. Renewable energy and real estate builders were notable losers.

2HFY25 witnessed 5/6 negative months

The benchmark Nifty50 yielded negative month-on-month (MoM) returns for five out of six months in FY25. The second half of the year was worst with five out of six months resulting in negative MoM return. However, the market breadth was negative in nine out of twelve months implying much higher volatility in the broader markets.

Institutional flows positive

Over institutional flows were materially positive for FY25. Net domestic and foreign flows in the secondary equity market amounted to Rs3591bn. Foreign Portfolio Investors (FPIs) were however net sellers of Rs2480bn in the secondary market, while domestic institutions pumped in a record Rs6071bn. FPIs were net sellers in eight out of the twelve months. The nifty-institutional flow correlation (73%) was decent in FY25.

Debt and Currency Markets

Indian debt and currency markets were volatile in tandem with the global trend. However, both bonds and INR managed to close the year on a buoyant note.

RBI cut the policy rates by 25bps and Cash Reserve Ratio for commercial banks by 50bps. The benchmark 10-year treasury bond yields eased to 6.58% from 7.11% a year earlier. USDINR weakened 2.6% to 85.59 from 83.35 a year earlier. Lending and term deposit rates were higher by up to 10-20bps. The yield curve shifted lower and flattened completely.

The RBI changed its policy stance to “neutral” from “withdrawal of accommodation” in FY24. The liquidity position however continued to remain tight, with banking system liquidity remaining in deficit for most part of the 2HFY25. The credit growth outstripped the deposit growth. Overnight and call money rates cooled 25bps in 4QFY25, due to aggressive open market operations carried out by the RBI.

Economic conditions

Overall FY25E GDP growth slowed down to ~6.2% as the effects of the low base of FY21 and FY22 tapered off and fiscal correction progressed further. The consensus estimates for FY26E GDP growth is slightly better at ~6.5%. Nominal GDP growth for FY25E has been materially lower at ~9.1%, and is expected to pick up to ~10.5% in FY26E.

·         CPI Inflation mostly remained within the RBI’s tolerance band of 4-6% (except for a short spike in October 2024). Core inflation eased below 4% in August and then February 2024.

·         Real rates have mostly remained in positive territory during FY24.

·         Fiscal deficit remained high despite moderation over the past few years.

·         The private sector investments failed to gather the desired pace, despite several government incentives. The government capex also slowed down in FY25. 9MFY25 investment to GDP ratio dropped to 32.6%. Private consumption recovered in FY25E from the sharp dip in FY24.

·         External conditions worsened during FY25. Merchandise trade balance deteriorated to USD292bn. Exports were lower yoy, while imports were higher by 6% yoy. External debt was higher by 10%. Net FDI flows continued to slow for the third consecutive year.

Commodities

FY25 was a mixed year for commodities. Precious metals (Gold +40%, Silver 39%) and Industrial metals (Zinc +17%, Copper +10%) recorded good gains, while energy (Brent Crude -17%, Coal -20%) and agri commodities (Wheat -16%, Soy -14%) ended the year with strong losses.

Crypto shine

Cryptocurrencies further strengthened their position with material rise in trading volumes and market capitalization. Bitcoin ended the year FY25 with a strong 21% yoy gain. More jurisdiction accepted cryptocurrencies as a valid medium of exchange, financial asset and/or tradeable asset.