India’s economy continues to show robust growth, with a 7.8% expansion in GDP for the third quarter and a projected growth rate of 7.6% for the fiscal year 2026. Private consumption saw a healthy growth of 8.7%, while manufacturing expanded sharply by 13.3%, according to a recent report by PL Asset Management.
Despite global market disruptions due to energy supply issues and changing monetary policies, Indian equities remained stable. This stability was attributed to strong domestic macroeconomic fundamentals, robust liquidity conditions, and consistent institutional participation.
The report emphasizes that India’s resilient macroeconomic environment and strong domestic liquidity have shielded the country from potential geopolitical challenges. However, risks such as increasing crude prices, a weaker rupee, slower global growth, disrupted logistics chains, and tighter global financial conditions could negatively impact India’s macroeconomic landscape.
Siddharth Vora, Head of Quant Investment Strategies at PL Asset Management, highlighted the current high-uncertainty global environment. He mentioned that elevated crude prices may lead to persistent inflation and higher interest rates, posing challenges to earnings, fiscal balances, and currency stability.
The report suggests that disciplined risk management and strategic positioning are crucial in the current scenario. It recommends a focus on large-cap investments, emphasizing factors like value, quality, and low volatility for better resilience in the market.
Looking ahead, the report anticipates that initiatives such as India–US tariff reductions, progress on the India–EU Free Trade Agreement, and the government’s substantial infrastructure investment plan will enhance export competitiveness, open up new growth opportunities, and accelerate domestic capital expenditure, supporting India’s long-term growth prospects.
Regarding inflation, the report indicates that it remains within the Reserve Bank of India’s tolerance range, providing policymakers with flexibility to navigate economic challenges.
