India CAPE Ratio
Current India CAPE
As of August 2026 · ratio
Source: INDA — iShares MSCI India ETF
Rough estimate. This single-country CAPE is approximated by rolling the INDA ETF price from a recent anchor — free data has no per-country 10-year earnings — so treat it as a directional gauge, not a measured CAPE. It is bounded and is not used in the headline Global CAPE. See the methodology.
By Dominic Roe · Data Engineer & Business Intelligence Developer Updated August 2026
Is India cheap right now?
✓ Real · INDAOn 1 of 3 trailing multiples, India equities are priced above the all-world index (VT). These are current, fund-reported figures — not the estimated CAPE series charted below.
| Measure | India | World |
|---|---|---|
| P/E | 22.9 | 22.6 |
| P/B | 3.14 | 3.32 |
| P/S | 2.72 | 2.55 |
| Dividend yield | — | 1.59% |
| ROE (quality) | 13.7% | 14.7% |
Green = cheaper than the world index on that measure. ROE is shown as context, not cheapness: a lower return on equity means part of a cheap multiple may be deserved rather than a bargain.
Against its own history, India's estimated CAPE of 33.6 sits at the 94th percentile — historically expensive for India — above most of its own past readings.
Multiples as of August 2026.
- Historical average
- 27.4
- 174 months
- Historical median
- 26.9
- Percentile rank
- 94th percentile
- vs full history
- All-time range
- 18.1 – 36.4
- Last updated
- August 2026
- since March 2012
Understanding this metric
What is it?
The Cyclically Adjusted Price-to-Earnings ratio (CAPE), also called the Shiller P/E or PE10, measures how expensive India equities are relative to their inflation-adjusted earnings over the prior ten years. By averaging a decade of real earnings it smooths out the booms and busts of the business cycle, giving a steadier read on valuation than a one-year P/E.
How is it calculated?
CAPE is computed by dividing the real (inflation-adjusted) price of the India equity market by the average of its real earnings over the trailing ten years. Both price and earnings are expressed in today's currency using a consumer price index, so a CAPE of 25 means investors are paying 25 times a smoothed, inflation-adjusted measure of annual earnings.
Historical interpretation
Historically a high CAPE has been associated with lower subsequent long-run real returns, and a low CAPE with higher returns. It is a valuation gauge, not a market-timing signal: rich valuations can persist or grow richer for years. Compare today's reading to the metric's own history — its average, median and percentile rank — rather than to a single "fair value" number. India is the exception on this site: it is not a cheap market but the most expensively valued of the major emerging markets, which makes it a useful test of what a high CAPE does and does not tell you. Indian equities trade at a clear premium to other emerging markets and roughly in line with the all-world index on earnings — a premium the market justifies by structurally high growth: favourable demographics, rising domestic consumption and strong returns on equity. The risk is precisely that premium: a high starting valuation has historically meant more muted long-run returns unless rapid earnings growth keeps delivering. The most useful read combines the CAPE percentile (how India is priced against its OWN, already-elevated, history) with the trailing multiples before deciding whether the growth justifies the price.
Limitations
CAPE has well-known limitations. Accounting standards, payout policies, profit margins, interest rates and sector composition all change over decades, which can shift the "normal" range upward or downward. The ten-year window still includes unusual periods (such as a deep recession) that distort earnings. CAPE says little about the next year and should be combined with other metrics rather than used in isolation. This series is an ESTIMATE, not a measured CAPE. Free data does not include long-history, per-country 10-year real earnings, so it is built by anchoring a recent CAPE level and rolling it through history using the inflation-adjusted price of the iShares MSCI India ETF (INDA) with a steady real-earnings trend removed. History only extends as far back as the country ETF (typically the late 1990s/2000s). Treat it as a directional valuation gauge. See the methodology documentation for sources and assumptions.
Frequently asked questions
Is the Indian stock market cheap right now?
No. India is the most expensively valued of the major emerging markets and trades roughly in line with the all-world index on earnings despite being an EM — a premium it justifies by high structural growth. Read its elevated CAPE against India's own (also-high) history rather than expecting an emerging-market discount.
Why is the Indian stock market so expensive?
Investors pay up for growth. Favourable demographics, rising domestic consumption, a deepening equity culture and high returns on equity have earned Indian shares a structural premium over other emerging markets. The open question is whether that growth keeps pace with the valuation.
Does a high CAPE mean India will underperform?
Not necessarily, but it raises the bar. Historically a high starting valuation has been linked to more modest long-run returns, so India needs to keep delivering rapid earnings growth to justify the price. CAPE is a long-horizon gauge, not a market-timing signal.
Is the India CAPE figure a measured ratio?
No. Only the US CAPE is a measured series (from Robert Shiller). India's CAPE here is an estimate built from a free ETF price proxy (INDA) and a recent anchor, so treat it as directional. The trailing P/E, P/B and P/S shown above are real, current figures reported by the country's tracker fund.
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