India‘s Transformation amid Next-gen Reforms

Research evidence excerpt

India‘s Transformation amid Next-gen Reforms

Foundation

June 19, 2026 10:56 AM GMT

Morgan Stanley India Company Private Limited+MIndia Equity Strategy and Economics | Asia Pacific Ridham Desai

Equity Strategist

India's Transformation amid Ridham.Desai@morganstanley.comUpasana Chachra +91 22 6118-2222

Chief India Economist

Upasana.Chachra@morganstanley.com +91 22 6118-2246

Next-gen Reforms Bani Gambhir

Economist

Bani.Gambhir@morganstanley.com +91 22 6118-3027

With fundamental changes to the economy over the past Nayant Parekh

decade and next-generation reforms in the pipeline, India is EquityNayant.Parekh@morganstanley.comStrategist +91 22 6118-1008

entering a strong earnings cycle, with medium-term stock

market returns that could reverse its trailing underperformance.

Over the past decade, India’s economy has shifted from one gripped by scarcity, an

unstable macro and poor physical infrastructure to one that is larger, more

domestically financed, and has strong infrastructure. Its shift to a more formalized,

digitally intermediated and services-led economy has materially improved India’s Exhibit 1 : Relative U/P Could Reverse

MSCI India Relative to MSCI EM (10Y Rolling Returns)investability, in our view, and manifested approximately US$13tn in broad-based 180%140%

household wealth creation. 100%

60%

20%

That said, there remains room for improvement in terms of manufacturing depth, (20%)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

urban capacity, judicial capacity, energy security and agricultural productivity –

Source: RIMES, MSCI, Morgan Stanley Research

things that are being addressed through various measures. We see factor market