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Should You Invest In Indian Stocks And Funds During International Conflicts?

Worried about the safety of your money during an international conflict? Read this blog to understand how the Indian market has reacted to conflict in the past and find out whether you should invest in India during these tough times.
April 18, 2024

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International conflicts can be a terrible ordeal because there is a cost of human life involved, a cost that cannot be recouped. There are other, less devastating costs involved in the realm of finance, trade, and investments.  

This cost can trickle down to other countries as well since the world is far more intertwined and interdependent than before. 

Globalisation of this magnitude means that conflict thousands of miles away can cripple markets and create a climate of uncertainty. The result of the uncertainty is fear. 

People work hard to earn money and if the markets are in the red, questions like “should I invest in India?” and “is my money safe?” may arise. This blog looks to address these questions. 

History Of The Indian Market During Conflicts

The history of the Indian stock market is rich and stretches back to 1875 when BSE was established. There have been a few wars since and it is no secret that markets become volatile in the short term during the onset of conflict. 

That said, we can turn to data from the past 23 odd years to see how the Indian market reacts to conflict. We’ll look at the movement of Sensex and Nifty during international conflicts across three different decades. You can consult a Cube wealth coach or download the Cube wealth app.

1. Kargil War (3 May 1999 – 26 July 1999)  

Sensex dipped in April 1999 right before the Kargil war started. However, it experienced growth even during the war with a few instances of downward movement here and there. 

Sensex During Kargil War
Sensex During Kargil War

The trajectory of Nifty was more or less similar to that of Sensex during the Kargil war. One could argue that the war was short-lived and hence its effects too were limited, making it possible to invest in India with fewer reservations.

Nifty During Kargil War
Nifty During Kargil War

2. Iraq War (20 March 2003 – 15 December 2011)

Sensex had a few hiccups shortly before and after the Iraq war began on 20th March 2003. The trend was largely downward till May but Sensex gained 73% in 2003, becoming the 2nd best performing stock market in the world. 

Sensex Reacting To The Iraq War
Sensex Reacting To The Iraq War

Nifty also followed suit but it is also important to remember that the US Federal Government increased its interest rates in 2003, which also affected the Indian market albeit for a short period of time. You can consult a Cube wealth coach or download the Cube wealth app.

Nifty Reacting To The Iraq War
Nifty Reacting To The Iraq War

3. Russo-Ukrainian War (20 February 2014 - Ongoing)

We’ll take a look at how the Indian market reacted to the Crimean war of 2014. Sensex saw a minor drop on 20th February 2014 but it was a minor hiccup in the grand scheme of things. 

Sensex Reacting To The Crimean War
Sensex Reacting To The Crimean War

As has been the case so far, Nifty followed pretty much the same pattern as Sensex.

Nifty Reacting To The Crimean War
Nifty Reacting To The Crimean War

Growth Of Sensex And Nifty 

Sensex All-Time Growth
Sensex All-Time Growth

Nifty All-Time Growth
Nifty All-Time Growth

We can summarise what we’ve discussed so far in two broad points:

1. Indian markets have been known to be prone to short term volatility during international conflicts.

2. Sensex and Nifty have shown that they generally bounce back after setbacks. 

Now, let’s move on to potential reasons to invest in India during the current Russo-Ukrainian international conflict. 

Reasons To Invest In India During International Conflicts

1. India’s Stance & Long Term Implications

India has voted to abstain from taking a position in the Russo-Ukrainian conflict. Whatever the future outcome may be, India is setting itself to be a peacekeeper during these tough times. 

Furthermore, India does not rely heavily on Russia for crude oil. In fact, India imports less than 1% of its total crude oil reserves from Russia. That said, the exorbitant crude oil price may have a negative impact on the Indian economy. 

But all is not lost - the supply chain disruption in Europe caused by the ongoing conflict, especially when it comes to steel and other engineering goods, sets up India nicely to become an alternative supplier. You can consult a Cube wealth coach or download the Cube wealth app.

2. Surging Economy & Future Prospects

After a terrible 2020 owing to Covid, 2021 signalled a recovery in India’s economy. GDP went from -8.0% in 2020 to 12.5% in 2021, which meant that India hit a double-digit percentage growth in GDP for the first time since 2010.


GDP Growth (Real)











3. Potential For Lucrative Returns

Stocks? Mutual funds? Alternative assets? Take your pick. All these assets have historically generated lucrative returns. Take for example Sensex. It has grown by 8.20% over the past year and 93.05% over the past 5 years. 

That’s not all. Top mutual funds have been known to generate 4-16% returns on Cube while Cube’s alternative assets can generate anywhere from 8.15% to 12% returns. This leads us to the next point. 

4. Beauty Of A Diverse Market

The Indian market offers diverse investment opportunities within and across asset classes. Just take a look at the Indian stock market. You could invest in stocks from the realm of agriculture, e-commerce, PSUs, and more. 

Or, you could buy the market by investing in Indian index funds that track Sensex, Nifty, and other sub-indices. You could even turn to mutual funds in case you want a professional to manage your investment.  

If that isn’t your cup of tea, non-market linked investments like alternative assets are also an option. This category includes the likes of P2P lending, loans via merchants, asset leasing, and more.

Investing in the Indian market also extends to traditional assets like real estate (average growth rate of 5.5-6.0%), bank fixed deposits, NPS, PPF, NSC, gold, and plenty more.  

5. Strong Growth Potential

The Indian government has forecasted an 8.9% growth in the GDP for FY2022. In fact, data suggests that India is expected to be one of the fastest if not the fastest-growing economies in the world between 2021-2025.

Furthermore, the Indian stock market has earned global recognition as top indices like Nifty have grown by more than 1,750% since 1999. Analysts expect Nifty to pick up speed and hit 32,000 by 2025.

Top Investment Options In India


Average Returns



Mutual Funds


Alternative Assets


Real Estate


Digital Gold



1. Why should I invest in Indian stocks?

Ans. Investing in Indian stocks offers several advantages, including the potential for high returns, portfolio diversification, exposure to a growing economy, and opportunities in various sectors.

2. What are the risks associated with investing in Indian stocks?

Ans. Risks include market volatility, currency exchange rate fluctuations, political and economic uncertainties, and country-specific risks that can affect stock prices.

3. How can I invest in Indian stocks from abroad?

Ans. You can invest in Indian stocks from abroad by opening a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account, a Demat account, and a trading account with a registered Indian brokerage.

4. Are there any regulatory restrictions for foreign investors in Indian stocks?

Ans. Foreign investors can invest in Indian stocks, subject to certain regulatory limits and guidelines set by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).


There are no two ways about it - the brunt of international conflicts is borne by individuals even if they’re detached from the events themselves. However, data suggests that Indian markets have bounced back in the past after conflicts. 

While the climate may feel more tense and different this time around, India has caveats and resources in place to potentially recover and excel in the future. At the end of the day, money is personal and precious.   

That’s why it is best to consult a trained financial professional who’s been in the game long enough to help you choose the right path for wealth creation for now and the future. 

Note: Facts & figures are true as of 03-03-2022. None of the information shared here is to be construed as investment advice. Exercise caution when investing in assets like stocks, mutual funds, alternative investments, and others. You can consult a Cube wealth coach or download the Cube wealth app.


1. What should investors consider before investing in Indian stocks during international conflicts?

Ans. Before investing, evaluate your risk tolerance, conduct thorough research, and consider diversification. Also, stay informed about geopolitical events and economic indicators that may impact the Indian market.

2. How can an investor protect their investments during international conflicts?

Ans. Implement risk management strategies, like setting stop-loss orders, diversifying your portfolio, and investing in assets that may perform well in turbulent times, such as defensive stocks or gold.

3. Are there any tax implications for international investors in Indian stocks during conflicts?

Ans. Tax implications may vary depending on your country of residence and the double taxation avoidance agreements in place between India and your home country. Consult with a tax professional for guidance.

4. Can global conflicts create investment opportunities in Indian stocks?

Ans. Yes, periods of market volatility can create investment opportunities, as stocks may become undervalued. However, these opportunities come with increased risk, and timing the market can be challenging.

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Priya Bansal
Curious about personal finance and all things money. Can either find me reading a book or dancing to a tune.

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