India Set to Grow Despite Global Uncertainties: Bernstein

By siliconindia  |  Tuesday, 25 March 2025, 12:54:44 PM IST

India Set to Grow Despite Global Uncertainties: Bernstein
India's macroeconomic environment has improved, and the nation can expect GDP growth of about 6.5% for the next year, said a note from global brokerage house Bernstein on Tuesday. India is well placed for economic strength despite continued global uncertainties, including a threat of recession in the U.S. and trade-related issues.
Bernstein added that India's growth path has always been independent of the American economy, even bouncing back ahead of the West in periods of economic slowdown. As the global markets remain volatile, India will gain from a stabilizing trade environment. The brokerage retained a bullish stance on the Nifty index with a year-end target of 26,500. It did issue a word of caution, though, that market sentiment would continue to oscillate based on international events.
A possible U.S. recession would bring down commodity prices, which would be a boon for India by lowering the cost of imports and alleviating inflationary pressures. Commodities like crude oil, copper, aluminium, and steel, which are highly correlated with U.S. economic performance, could experience muted prices, keeping India's import bills under control and steadying the Indian rupee.
Also, the possibility of rate reductions during the second half of the year may serve as a driving force for the economy's revival. Although FIIs have witnessed outflows over the past couple of months, robust domestic participation keeps momentum in the market.
Sentiment among investors has been further supported by a stable rupee, sustained buying by domestic institutional investors (DIIs), and a positive sentiment from international financial institutions. Morgan Stanley's recent review of India's economic outlook and inflation has reaffirmed market players' confidence.
With hopes of a rate cut by the Reserve Bank of India (RBI) and sustained optimism from international analysts, India's economic prospects are strong, making the country well-equipped to ride out global uncertainties.

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