India is undergoing an industrial renaissance, we expect the rise in India’s new economy sectors — high-tech services, digital start-up ecosystem, services exports — could raise its potential growth to 6.5% in the next 10 years, up from an average 6% growth before the pandemic. India’s strong government spending and private investment growth, robust FDI inflows and booming services exports will continue to power employment, private consumption, and productivity gains. We expect India’s GDP growth to reach 6.0% this year.
While much of the world grapples with economic slowdown, India shines as a bright spot. There has recently been a surge in India’s service exports — a pivotal driver for a shrinking current account deficit. This trend, in turn, bolsters the Indian rupee (INR). India also boasts a robust foreign exchange reserve, exceeding US$600 billion ($804.6 billion). This substantial reserve acts as a formidable anchor for the INR’s stability.
India’s economic growth outlook remains solid, accompanied by a stabilisation in inflation rates. Furthermore, both India and the rest of the world are poised for the end of monetary tightening cycles, adding to the appeal of India bonds.
