Jefferies: India a Safe Harbor Amid US AI Capex Risks, 2026 Outlook Positive

• Jefferies warns of US AI capex implosion risk, linking it to private credit and debt-funded spending, clouding the US economic outlook.
• India is positioned as an "anti-AI capex trade," benefiting from AI adoption without the capital-intensive infrastructure build-out.
• India's 2025 equity underperformance was cyclical, not structural, with strong macroeconomic buffers like low CAD and high forex reserves.
• FDI picture is nuanced, with gross inflows rising but net affected by PE exits and outbound investment, signaling deeper global integration.
• Jefferies expects MSCI India earnings to rebound to 13-14% next fiscal year, but cautions that current valuations leave little room for disappointment.

Why It Matters: Jefferies sees India as a relative safe harbor for 2026, contrasting with US AI capex risks.