New Delhi, July 28 -- India faces external risks even as the domestic economy stays on a solid footing, according to Ramesh Mantri of WhiteOak Capital Asset Management Co.

Improving domestic growth, rising liquidity, and potential rate cuts are expected to aid recovery, but the "real concern is on the external front" from growing global protectionism to US-China tensions, said Mantri, chief investment officer (CIO) at the company.

Mantri isn't worried about domestic markets. Even though small-cap valuations are a concern, he expects stable domestic flows-from mutual funds, insurance (including unit-linked plans), and Employee Provident Fund Organisation-to support Indian equities and are unlikely to taper off anytime soon, he said.

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