New Delhi, Aug. 4 -- A steep reduction of India's twin deficits, robust economic growth underpinned by a recovery in the government's capital expenditure, lower real interest rates and rising profit-to-GDP ratio create the perfect mix for a larger portion of household savings to flow into equities. These factors set the stage for a sustained bull market, interspersed with a possible correction or two over the next few years, believes Ridham Desai, managing director and chief equity strategist India, Morgan Stanley.

While the Indian economy is resilient enough to weather the ongoing tariff storm kicked up by the US, Desai remains watchful of the next round of negotiations for a bilateral trade agreement between the two countries and the e...