6 Comments

Thanks for your forthright comment on the state of the Indian economy. Not everyone sticks his neck out to do so

Expand full comment

Thanks for your forthright comment on the state of the Indian economy. Not everyone sticks his neck out to do so

Expand full comment

An upside for india could be the mounting US-China discord and tension. But India’s ability to attract companies exiting China is severely limited by overt and militant religious extremism. Vietnam followed by Malaysia and for now Indonesia seem to be the favored destinations for manufacturers under U.S. pressure leaving China.

Expand full comment
author

Manufacturing in India instead of China is a much touted growth strategy here. I don't know whether global manufacturers will stay away from India for ethical reasons. They have largely stayed away for other reasons - bureaucratic impediments, labour skills, infrastructural weakness, weak contractual enforcement etc.

Each of these has improved over time, but not at the same pace as other nations in Asia.

Expand full comment

I think the argument on equity is flimsy when you consider that on a 3 year basis the nifty has nearly doubled. This is the stock market, not inflation bonds. We can’t hold a gun to its head and expect it to provide an inflation beating annuity.

Expand full comment
author

Fair point.

However, when markets boom, newbies enter, expecting the good times to roll. When they dont, and equity doesn't keep pace with inflation, they tire - or panic, if mkts drop sharply.

Expand full comment