Ask which market is better, India or the US, and the honest answer is: it depends on which decade you ask about.
2003–2012: India’s decade
From the end of 2002 to the end of 2012, the Nifty 50 rose from 1,093 to 5,905. That is about 18.4% a year. Over the same ten years, the S&P 500 went from 880 to 1,426, about 4.9% a year in dollars. Even with the rupee weakening from ₹48 to ₹55, an Indian investor in the S&P 500 earned only about 6.4% a year in rupees.
Anyone who looked at that record in 2013 would have concluded that Indians had no reason to invest abroad.
2016–2025: America’s decade
From the end of 2015 to the end of 2025, the picture flipped. The S&P 500 rose about 12.8% a year in dollars. The rupee fell from ₹66 to ₹90, lifting that to about 16.4% a year in rupees. The Nifty 50 delivered about 12.6% a year, a strong result that still trailed.
Anyone who looks only at this decade might conclude the opposite: that India is the weaker market. That would be just as wrong.
What happens in bad years
| Year | S&P 500 in $ | Dollar vs rupee | S&P 500 in ₹ | Nifty 50 |
|---|---|---|---|---|
| 2008 | −38.5% | +22.9% | −24.4% | −51.8% |
| 2013 | +29.6% | +12.6% | +45.9% | +6.8% |
| 2020 | +16.3% | +2.4% | +19.0% | +14.9% |
| 2022 | −19.4% | +11.2% | −10.5% | +4.3% |
Look at 2008 and 2013. When global stress hit India, the rupee tended to weaken, and that softened losses on dollar assets for an Indian investor. In 2022 the pattern reversed: US stocks fell while the Nifty held up. Neither market protected the other every time. Together, the ride was smoother than either alone.
The real lesson
Nobody reliably predicts which decade will belong to whom. Investors who moved everything to India in 2013, or everything to the US in 2025, were reacting to the last ten years, not the next ten.
Diversification isn’t about picking the winner. It’s about not needing to. Holding both, in proportions set by your goals, means you don’t have to be right about the next decade.
Figures are price returns from year-end index levels, converted at year-end USD/INR rates, excluding dividends, taxes and costs. Past performance does not indicate future returns.
Sources
- Motley Fool: S&P 500 annual closes
- StockPriceArchive: Nifty 50 history
- FRED: USD/INR end-of-period rates
- currencyapi: USD/INR history
- Interactive Brokers market data (Nifty 50 and SPY, 2021–2026)