India Economics Update External vulnerabilities remain low The widening in India’s current account deficit in Q3 was due in large part to seasonal patterns. Over a four-quarter sum, the deficit narrowed and, given also that FDI inflows remain strong, there is... 23rd December 2015 · 1 min read
India Economics Update Markets take Fed tightening in their stride Financial markets in India have taken yesterday's decision by the US Fed to hike interest rates for the first time in nearly a decade in their stride. A bigger test might come if the Fed now tightens... 17th December 2015 · 1 min read
India Economics Update What is holding up the Goods and Services Tax? Passage of the long-awaited Goods and Services Tax (GST) in India continues to be delayed by major issues ranging from disagreements over the tax rate itself to which items will be covered. Given this... 16th December 2015 · 1 min read
India Economics Update Trade deficit looks sustainable despite export weakness India’s trade deficit remained stable in November as the continued slump in exports was offset by another collapse in imports. With this trend set to continue, the overall current account position... 16th December 2015 · 1 min read
India Economics Update Public sector pay rise to pose another inflation risk Inflation is likely to have accelerated in November, as last year’s slump in global oil prices begins to drop out of the annual comparison. Looking ahead, the Pay Commission’s recommendation for a... 8th December 2015 · 1 min read
India Economics Update RBI's faith in finance ministry is misplaced The RBI is expressing a high degree of faith in the finance ministry’s ability to offset a rising public sector wage bill by boosting tax revenues or trimming other forms of current spending. We fear... 7th December 2015 · 1 min read
India Economics Update RBI holds rates, loosening cycle now at an end The Reserve Bank of India (RBI) kept its repo rate on hold at 6.75% today and, rather than just being on pause, we maintain our view that the loosening cycle is now at an end. 1st December 2015 · 1 min read
India Economics Update New bankruptcy code would be a big step forward Plans to overhaul India’s archaic bankruptcy laws, due to be discussed in the upcoming winter session of parliament, would be a major step towards creating a more favourable business climate and... 27th November 2015 · 1 min read
India Economics Update Rupee to continue drifting lower The Indian rupee has weakened against the US dollar over the past month and, looking ahead, the currency could drift a little lower as the US Fed begins to tighten policy. But given the big... 19th November 2015 · 1 min read
India Economics Update Trade deficit to remain in check India’s trade deficit narrowed in October and, looking ahead, there are reasons to think that the import bill will remain in check. Given this, the overall current account position looks unlikely to... 17th November 2015 · 1 min read
India Economics Update Government’s FDI push still requires wider reform Measures announced yesterday to further ease restrictions on foreign direct investment into India should help to build on one of the main policy successes of the Modi government so far. However, wider... 11th November 2015 · 1 min read
India Economics Update BJP defeat in Bihar dampens reform prospects The heavy defeat for Prime Minister Modi and the BJP in the Bihar state assembly election suggests that political goodwill towards the winners of last year’s general election is beginning to run out... 9th November 2015 · 1 min read
India Economics Update Inflation set to accelerate again Inflation is likely to have risen in October, as the favourable base effects that helped to anchor food inflation in recent months continue to fade. With inflation expectations also edging up, there... 6th November 2015 · 1 min read
India Economics Update Is monetary policy “just right”? Comments this week from RBI Governor Raghuram Rajan and Finance Minister Arun Jaitley hint at a welcome thawing in their frosty relationship. What’s more, they support our view that the rate-cutting... 4th November 2015 · 1 min read
India Economics Update Privatisation target out of reach With more than half of the fiscal year having elapsed, the government’s aim of raising nearly INR700bn in revenues through the privatisation of various state-owned companies looks increasingly... 30th October 2015 · 1 min read
India Economics Update Less to economic relations with Africa than meets the eye The ongoing India-Africa Forum Summit in Delhi has been accompanied by a great deal of confused commentary on the nature and extent of economic relations between India and Africa. Contrary to what... 28th October 2015 · 1 min read