GlobalSource Partners | Country Insights

The RBI has announced that Rs.2000 currency notes would be gradually withdrawn. The announcement features lead time and is not disruptive in the way that the famous "demonetization" announcement of 2016 was. But it provokes unhappy memories of demonetization. Alongside this, a story has been p...

Important gains in early 2023

INDIA · Report · 08 May 2023

The labor market has long been intractably stuck, with the number of persons working at about 400 million. In April 2023, this jumped by 22 million persons to about 430 million. This is first suggestion of an important change in the labor market in many years. Perception-based measures of how ...

The early evidence on benefits from China+1

INDIA · Report · 24 Apr 2023

Have the possibilities for India improved greatly, when many global firms view India as the “+1” in a China+1 sourcing strategy? We pull together the early evidence on 1) the share of India vs. China in US imports; 2) FDI into India; and 3) exports from India. There is low evidence in favor of a ...

The puzzles of the exchange rate and monetary policy

INDIA · Report · 10 Mar 2023

RBI has defended an exchange rate of about 82 or 83 rupees to the dollar in recent weeks. This interest rate defence involves raising the short rate. The third outcome that RBI is managing is the long rate: in its capacity as the debt manager for the government, it has held down the long rate...

The outlook for private investment

INDIA · Report · 09 Mar 2023

During the pandemic, at first, the biggest firms fared rather well, and this was reflected in the earnings growth of listed companies. There are two problems with this post-pandemic growth. First, this was a case of the biggest firms’ gaining share, which could only happen for a limited period of...

What we can learn from the Adani story

INDIA · Report · 10 Feb 2023

When investment faltered from 2011 onwards, some felt that there was a "deals rather than rules" solution to the problem. Perhaps the state could foster a small set of private "national champion" firms that would play a leadership role in investment. Through these firms, there could be a new rena...

The monetary policy and exchange rate situation

INDIA · Report · 27 Dec 2022

Conditions on the INR market have changed; RBI now seems to be preventing an INR appreciation. Conditions on inflation have also changed: there has been a sharp decline in month-on-month price gains. When the Fed raises rates in coming months, there will now be a conflict at RBI. The exchange...

Greater sanity at the end of a startup tech boom

INDIA · Report · 14 Nov 2022

India went through a dramatic period with the success of technology startups backed by venture capital. At its peak this phenomenon induced a significant impact upon the labor market and was starting to reshape the behavior of established financial and non-financial firms. The bloom is off this r...

The monetary policy and exchange rate situation

INDIA · Report · 30 Sep 2022

The export boom of 2020 and 2021 came to a halt in early 2022. Discounted crude oil from Russia has helped keep down the cost of importing crude oil. Inflation that exceeds the target of 4% remains a problem. Rupee depreciation will pass through into a small increase in inflation. The trailing P/...

Reading economics in chess

INDIA · Report · 06 Sep 2022

Indians have done well in chess for a long time. In September 2022, 11 of the top 50 teenagers were from India. This underlines the upper tail capabilities in India in the eyes of global decision makers. The rebranding of India was shaped by the comic strip Dilbert’s “Asok” character in the 19...

The INR at 80

INDIA · Report · 25 Jul 2022

Recent statements by the RBI Governor have clarified the commitment of RBI to defending the exchange rate. Round numbers such as 65, 70, 75, 80, etc. seem to be places where the RBI takes a stand. USD/INR volatility is lower for the last Rs.1 or Rs.2 prior to the round number, and then volatility...

The short-term and medium-term outlook for export-led growth

INDIA · Report · 21 Jul 2022

During the pandemic, Developed Markets consumers supported the world economy by buying more goods, and there was a great export boom in India. This export boom is likely to subside, given the combination of DM fiscal policy normalization, monetary tightening, and DM consumers' rotating away from ...

Outlook on the recovery

INDIA · Report · 12 Jul 2022

The most interesting question in Indian economics concerns the strong performance of listed companies in late 2021 and early 2022: will this be maintained and will it carry forward? Or will it peter out? Strong firm performance has been assisted so far by high export growth, but there are some...

Developments in monetary policy

INDIA · Report · 07 Jul 2022

The inflation situation in India is in violation of the inflation target (which demands 4% inflation, and a band between 2 and 6 per cent), but the deviations are relatively modest when compared with those seen in DMs. The RBI is facing difficulties achieving its three objectives – exchange rate ...

Monetary policy strategy in a time of DM tightening

INDIA · Report · 16 Jun 2022

The RBI is juggling three objectives: a desired level of the exchange rate, cheap financing for the fiscal deficit, and inflation. In recent months, there have been capital outflows and the sale of reserves as part of currency policy. DM tightening will exacerbate these pressures. There may be ca...