No pessimism, SIPs soaring.

Blaming external factors, Finance Minister Nirmala Sitharaman said, "We should understand the factors and focus on the three 'F's - fuel, fertiliser and foreign exchange." "We should also appreciate that the challenges are more [externally] driven." "And a pessimistic, cynical narrative is generated, which is just not right. It is not right because it is fear mongering. India cannot afford fear mongering. India continues with a robust economy." The Wire. It was meant to be a stirring speech, but fear is also an 'F' word. A US-Iran peace deal will not improve matters because "the Middle East crisis has exacerbated a different kind of shortage in the world's most populous nation - of capital and ideas. Neither gap will be plugged any time soon. The two flows are interlinked." India has been financing its current account deficit with capital surpluses, but "More than 60% of IPO fundraising last year ended up giving exits to firms' original sponsors. In other words, Indian households and institutions' bought the IOUs, and foreigners took out dollars," wrote Andy Mukherjee. "An astonishing $53 billion has exited Indian stock markets in the last 18 months." Because the inflow into Systematic Investment Plans (SIP) by the Indian middle class has increased from Rs 200 billion per month to Rs 320.87 billion, so that the price-earnings ratio is at 22.5 when the emerging-market average is 15-16. Domestic buying is allowing foreigners to exit at higher prices and this is leading to the rupee's weakness, wrote Swaminathan Aiyar. Another 'F' for foreigners. In October 2025, "At a global summit where Elon Musk, Mark Cuban and Eric Schmidt debated the future of AI, energy and defence, India wasn't mentioned even once. Why? Because we still haven't built the deep, scalable ecosystems that make a nation unavoidable in global conversations," wrote industrialist Harsh Goenka. Zero innovation. Instead we get, "Most investors lose money trying to predict market highs and lows. There is a smarter, simpler way: Rupee Cost Averaging. Invest a fixed amount every month, no matter what the market does. That is it." ET. Doubling down on SIP which will give foreigners more opportunities to sell and put more pressure on the rupee. This has resulted in a windfall gain for the government as the RBI transferred Rs 2,865.88 billion (nearly Rs 2.9 trillion) as dividend for 2026-27. "It is close to 8% of the Centre's revenue receipts." "The RBI accumulated dollars over many years when the rupee was much stronger When it sells those dollars today at a weaker exchange rate, it books a rupee gain." In October 2025, "RBI significantly relaxed the framework for External Commercial Borrowings (ECBs) effective 16 February 2026, permitting entities to borrow from any person resident outside India, enhancing the ECB limit from $750 mn to $1 bn / 300% of net worth, relaxing it for financial sector regulated entities, removing the restrictions on all-in cost etc." vinodkothari.com. May be because increased borrowing in dollars by companies will increase forex reserves, and if the company goes bankrupt, there will be no sovereign risk. Companies borrow abroad when interest rates are low. However, Indian companies earn in rupees and when the rupee falls their cost of repayment may become intolerable. This leads to 'fear of floating', wherein the RBI "knows that a crash of the rupee would wreck corporate balance sheets with large dollar liabilities, make imports costlier and impact portfolio flows" inducing the RBI to intervene to support the rupee. This was called the 'original sin' by economists Barry Eichengreen and Ricardo Hausman, wrote Prof Tulsi Jayakumar. 'Fear of floating' is a double 'F'. Fleeing foreign investors, fiscal monetisation, fear of floating, so many 'F's to fear. But SIP investment is soaring. Who is   pessimistic?