India’s Resurgence Should Weather Trade Tensions

This podcast discusses the recent slowdown and subsequent recovery of the Indian economy. Chetan Ahya, Morgan Stanley's Chief Asia Economist, attributes the slowdown to a double tightening of fiscal and monetary policy but highlights the emerging recovery driven by supportive fiscal policy (increased capital expenditure and tax cuts), easing monetary policy, moderation in food inflation, and strong growth in services exports. He cites the near doubling of India's services exports since December 2020, reaching $410 billion annually, as a key factor. While acknowledging risks from potential trade tensions with the US, Ahya expresses confidence in India's economic outlook and its potential to outperform other regional economies.