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    BUSINESS & TRADE                                                      AUGUST 07, 2026      |  The Indian Eye 34

                     Positive Signals Emerge for Indian

                  Economy Despite Global Uncertainty

              Strong domestic demand, improving foreign investor sentiment and resilient financial

                           markets suggest India remains well positioned for long-term growth.

            OUR BUREAU                                                                                            Reserve Bank of India is likely to
                                                                                                                  maintain a policy approach broadly
            New Delhi / Mumbai
                                                                                                                  aligned with the US Federal Reserve,
               ndia’s economy is showing en-                                                                      which has kept interest rates on hold.
               couraging signs of strength even                                                                       The biggest uncertainty facing
            Ias global uncertainties continue to                                                                  India remains the global environment.
            cloud the investment landscape. After                                                                     Geopolitical tensions, especially
            nearly two years of sustained foreign                                                                 developments involving Iran, con-
            capital  outflows,  there  are  early  in-                                                            tinue  to  influence  international  oil
            dications that overseas investors are                                                                 prices. As one of the world’s largest
            beginning to reassess India positive-                                                                 crude oil importers, India remains
            ly. At the same time, strong domestic                                                                 vulnerable to sustained increases in
            consumption, healthy tax collections,                                                                 energy  costs,  which  affect  inflation,
            robust credit growth and continued                                                                    the  current  account  deficit  and  the
            interest in Indian government bonds                                                                   value of the rupee.
            point to an economy that remains fun-                                                                     Global  financial  conditions  also
            damentally resilient despite geopoliti-  As one of the world’s largest crude oil importers, India remains vulnerable to sustained   remain uncertain.
            cal tensions and inflationary pressures.  increases in energy costs, which affect inflation, the current account deficit and    Shanker pointed to increasing
                While risks from volatile oil prices,              the value of the rupee (File photo)            leverage among major US companies,
            the Iran situation and global interest                                                                particularly amid massive investments
            rates cannot be ignored, market ex-  ably. His assessment that Indian equi-  dia’s government bond market.  in artificial intelligence infrastructure
            perts believe India’s long-term growth   ties are “probably oversold” suggests   India’s inclusion in major glob-  and data centres. Such developments
            story remains intact. The discussions                                                                 could keep global bond yields elevat-
            at the ninth edition of the Motilal   valuations have become more attrac-  al bond indices has already begun   ed, reducing the pace at which interest
                                              tive for overseas investors seeking
                                                                                attracting stable foreign investment
            Oswal Business Impact Conference   long-term opportunities.         into government securities. Although   rates decline internationally.
            (MOBIC)  in  Mumbai  reflected  cau-                                Bloomberg has temporarily delayed    Long-term fundamentals
            tious optimism rather than exuber-      Domestic economy            including Indian Government Securi-   The overall message emerging
            ance, suggesting that India’s econom-  Even more important than for-  ties in its Global Aggregate Bond In-  from MOBIC 2026 is one of cautious
            ic fundamentals continue to inspire   eign capital is the continued strength   dex, market experts insist this should   confidence.  India  is  benefiting  from
            confidence among investors.       of India’s domestic economy.      not be interpreted as a negative ver-  resilient domestic consumption, accel-
                                                  Agrawal painted a positive picture
              Foreign investor sentiment      of economic activity, saying there was   dict on India’s sovereign debt.  erating credit growth, healthy tax rev-
                One of the most significant posi-                                   Agrawal explained that bench-  enues  and  growing  international  in-
            tive developments is the apparent turn-  a clear pickup across sectors. Several   mark providers are adopting a cau-  terest in both equity and debt markets.
                                              key indicators support this assessment.
            around in foreign investor sentiment.  Automobile sales continue to   tious operational approach to ensure   While geopolitical uncertainty and in-
                According to  Motilal Oswal Fi-                                 market systems function smoothly be-  flation continue to create headwinds,
            nancial Services Chairman Raamdeo   remain  strong,  reflecting  resilient   fore full inclusion.     they have not fundamentally weak-
            Agrawal, foreign portfolio investors   consumer  demand  despite  higher   Ashish Shanker, Managing Direc-  ened the country’s growth trajectory.
                                              borrowing costs. Healthy Goods and
            (FPIs), who had remained persistent   Services Tax  (GST) collections  indi-  tor and CEO of Motilal Oswal Private   The early return of foreign in-
            sellers over the past two years, are   cate that business activity and con-  Wealth, echoed this view, arguing that   vestors after prolonged selling could
            beginning to return to Indian mar-                                  the delay reflects broader global mar-  mark an important turning point if
                                              sumption remain robust. Meanwhile,
            kets. He noted that substantial for-  credit growth has accelerated sharply,   ket dynamics rather than concerns   supported by stable global conditions.
            eign capital had already exited India   rising to nearly 18 per cent compared   specific to India.    At the same time, structural reforms,
            during this period, driven by relatively   to around 9-10 per cent last year.  Despite the positive outlook, ex-  expanding  financial  markets  and  ris-
            expensive market valuations, stronger   Strong bank lending typically   perts acknowledge that inflation con-  ing domestic demand continue to
            returns in competing global markets   signals increased business invest-  tinues to limit the scope for aggressive   strengthen India’s  long-term  invest-
            and the absence of an artificial intel-  ment, higher consumer spending and   monetary easing.        ment appeal.
            ligence-led investment boom compa-  expanding economic activity. Cred-  Shanker does not expect Indian    For policymakers, the challenge
            rable to that seen in the United States.  it  growth  also  reflects  confidence   interest  rates  to  decline  sharply  in   will be maintaining macroeconom-
                However, Agrawal believes the                                   the near future, pointing to persistent   ic stability while supporting growth.
            selling may have gone too far.    among  both  lenders  and  borrowers   global and domestic inflationary pres-  For investors, the current environ-
                                              about future prospects.
                He observed that during the past                                sures. Imported inflation, particularly   ment appears to offer opportunities
            week there had been signs of a rever-  Bond market confidence       through higher commodity and energy   grounded not in short-term opti-
            sal, with foreign institutional investors   Another encouraging trend is the   prices, remains a significant concern.  mism but in the enduring strength of
            once again looking at India favour-  growing international interest in In-  Similarly, Agrawal believes the   India’s economic fundamentals.

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