In the first of a series of country-specific reports, Patrick Sherwen examines the complex and dynamic political and financial situation in India.
No so long ago, India – and its BRIC brothers Brazil, Russia and China – was considered not only a great investment opportunity, but one of the new drivers of global economic growth. Today, through the lens of global financial crisis, the perception is very different.
The Indian government has cut its growth estimate to 7.1%, from 9.6% in 2007 to 2008, which is optimistic compared with the 5.5% estimate offered by Citigroup. This is considerably better than the pre-liberalisation rate of about 3.5%, but still disappointing, and has dashed hopes that India would be more or less immune to the current troubles.
With an election only months away, what can investors expect to happen next? Will India return to its tiger-ish performance or will its previous growth be exposed as nothing more than an Indian rope trick?
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