The BSE Sensex is now trading at a lower price-to-earnings (P/E) ratio than the Dow Jones Industrial Average for the first time since 2009. Historically, the Sensex has traded at an average premium of 25 percent over the Dow, reflecting India’s higher growth potential. In the October-December 2024 quarter, corporate earnings in the US grew by 16 percent, whereas in India, earnings grew only 6 percent. For the full 2025 calendar year, US earnings are expected to continue outperforming India’s, with the latter projected to grow at 11% in FY26. Foreign portfolio investors (FPIs) have withdrawn nearly Rs 2.5 trillion from Indian equities since September 2023, causing Sensex to fall 12 percent during this period. In contrast, the Dow has remained largely stable, with earnings of top 30 US companies (Dow constituents) growing 8.9 percent, compared to 10 percent growth in Sensex companies. However, due to the rupee’s depreciation, the growth of Indian firms translates to just 5.6 percent in US dollar terms, making them less attractive to global investors.