A surge in investments by retail traders and resurgent foreign inflows have put India’s stock market on the brink of reaching a $4 trillion valuation for the first time. The market capitalization of securities listed on the nation’s exchanges has tripled since the March 2020 pandemic low, nearing the $4 trillion mark. India’s benchmark NSE Nifty 50 Index soared 2.1% after Prime Minister Narendra Modi’s ruling party won three crucial state elections, reducing political risk for investors and increasing expectations of policy continuity. The nation’s stock market is attracting global investors as an alternative to China, with $15 billion in overseas funds flowing into local shares this year. The retail investing boom that took off during the pandemic has also contributed to the market’s climb. The Nifty gauge is on track for an unprecedented eighth consecutive year of gains, up 14% in 2023. India’s strong economic growth, with a 7.6% jump in GDP in the last three months, stands out amid global economic slowdown. The country’s appeal has been enhanced by China’s tepid post-pandemic recovery and tensions with the West. Indian stocks have been outperforming global emerging-markets and Chinese peers, attracting foreign pension and sovereign wealth managers to India. The booming stock market has also ignited a frenzy for initial public offerings, with new listings posting significant gains. However, concerns have been raised about high valuations and overcrowding of the market. The increasing participation of individual investors, influenced by unauthorized advisers and social media influencers, is becoming a concern for regulators. Despite these risks, Modi’s victories in state elections have boosted sentiment and increased India’s attractiveness for foreign investors. The market is expected to continue to attract capital inflows.