India – Resilient in times of turbulance
May 28, 2015

iinchin tradeIndia truly is the proverbial elephant economy. When other economies are buzzing, bursting and sizzling their way through high growth numbers, the world looks to India and wonders why she is so slow.

When economies around the world bust, crackle and fizzle down, India is considered the resilient behemoth who can stand the test of time. An economy that needs severe patience to deal with, groom into and mature, India like the elephant never forgets. She’s learnt from past mistakes, likes to move slow and steady and generally takes care of her heard. Yes she might strike wild if she is frightened or lost, she has been plundered for her riches, yet she leads a fairly happy, non-intrusive existence in the corporate jungle.

India should be glad to be the elephant. Every jungle needs one. Especially when dragons come to roar, elephants bring about a sense of calmness. It is this resilient calmness that companies and investors are flocking to as global currencies and stock markets rumble.

As a result of the yuan devaluation, China’s stock market crash and general casino attitude to global economies, multi national companies are looking at changing strategies. Boardroom business now focuses on how to maximise a presence in India. If one doesn’t exist, then how to get in and make the most of India. The Indian government shouldn’t be taking credit for this though.

India has emerged as a natural destination for investments due to her elephant nature. Nonetheless, India’s impact and economy cannot yet stand in comparison to China’s who is 5 times her size. – As per the latest data available with the World Bank, GDP of the U.S. is over US$17 trillion. This compares with China at over US$10 trillion and India US$2 trillion, leaving very little impact on the global economy.

Furthermore, China’s bust, crackle and fizzle has had a less than significant impact on India’s economy due to the fact that India isn’t dependent on exports, competes little with China across industries globally and the Rupee has shed an equivalent value as the Yuan, thereby leaving little damage behind. If the yuan does devalue further, which is expected as analysts see China move from a growth based economy to a more mature model, the Rupee has the elasticity to adjust further.

Analysts expect China to further devalue the Yuan to boost exports and move move up the value chain. During this process, India is expected to witness an optimistic burst of investments, as she is the BRICS nation with the best growth trajectory ahead, has a stable government, a strong economy, a good Central bank governor and sensible tax regime. The government doesn’t interfere too much in the money markets and people are optimistic about growth in the forthcoming quarters.

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