Outlook on Indian Economy:

There has been a steady flow of reforms focused on areas like governance, ease
of doing business and fiscal prudence. In the first six months, the new
government has announced labour reforms, diesel price de-control, the Make in
India movement along with progress in GST talks. Such concrete initiatives could
herald an era of sustainable growth for India.
Indias economy, measured by the Gross Domestic Product (GDP), is expected to
grow over 6% in 2015. This is significantly higher than the 5.2% expected in
2014. In fact, market expectations for the economic growth are higher at 6.5-7%
over the next 3-5 years.
The biggest positive for India as a net importer of crude oil has been the
steep fall in crude oil prices. The fall in crude oil prices will substantially improve
Indias fiscal deficit and its current account deficit (as ~30.0% of Indias import
constitutes of oil imports). Also, softening of international crude oil prices since
September has eased price pressures in transport and communication segment
of CPI inflation, and fuel and power segment in WPI.
Indian businesses expect stable economic conditions on the global and domestic
fronts in the near term, which augur well for the countrys merger and acquisition
(M&A) landscape. India remains among the top three preferred destinations for
investment, as political stability, a positive credit outlook and upbeat
expectations on corporate earnings contribute to a positive outlook on the
countrys transactions environment.
Private and foreign participation in Indian industry will increase dramatically.
Sectors such as retail, insurance, aviation, media, and even defence, are likely to
see FDI levels of 74-100 per cent by 2015. However, an emerging trend - to
impose non-equity restrictions on private investment - will instead become
established.
The revival of investment, a possible easing of interest rates in mid-2015, and
improved growth in the industrial economies should boost growth.