Policy Support Strengthens Confidence in India's Banking Sector

India's automotive sector continues to witness evolving consumer preferences, with alternative fuel vehicles including electric vehicles (EVs), hybrid vehicles, and CNG-powered vehicles accounting for a record share of the passenger vehicle market in June 2026. The trend reflects the growing adoption of cleaner mobility solutions, supported by improving product availability, expanding infrastructure, and evolving consumer preferences.

The renewed inflows reflect improving sentiment towards India's banking sector amid measures introduced by the Reserve Bank of India and the Government to facilitate overseas capital inflows and enhance liquidity within the financial system. These initiatives include continued support for foreign currency funding and tax-related reforms aimed at improving the investment environment. The return of foreign investment reflects continued interest in India's banking sector. Stable credit growth, improving liquidity conditions, and supportive policy measures continue to reinforce the sector's role in supporting economic activity and financial intermediation. The latest developments highlight the importance of a well-capitalised and liquid banking system in supporting India's long-term economic growth while reflecting continued interest from global investors in the country's banking sector.

Source: Reuters Data as on: 7th July 2026

*Portfolio allocation as on 30th June 2026. Allocations are subject to change based on portfolio positioning, investment decisions, and market conditions.

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