Foreign institutional investors from the US and Europe have shown growing optimism about India. The positive outlook is said to be due to improved economic, political and geopolitical outlooks, as well as India's ability to undertake structural reforms. Despite a 4.6% fall in emerging markets this year, India is still trading at a premium of around 62% on a 12-month forward price-to-earnings (PE) basis. Nonetheless, UBS remains cautious on India compared to EMs due to weak growth and return on equity expectations.