India has the potential to grow at around 8% in the medium term and it will remain relatively insulated from the volatile global economy. The GDP numbers are not quite right in any country. But what we look at is the composition of growth and whether things are generally heading in the right direction. We can say for India, things are heading in the right direction. Overall, we are pretty happy with the trajectory of the economy.

India is actually in a relatively good position; it is not that dependent on the rest of the world. India is mostly a domestic story. If it can broaden the consumption story from urban to rural, get some investment behind that, India, of all the countries we cover in Asia, is one of the least exposed to the ups and downs in the global economy.

China is getting expensive in textiles, clothing, footwear, low-end electronic components and things like that. We see these low end industries migrating to the Mekong and South-East Asia region. Bangladesh is also benefiting. I don’t have any evidence of it migrating to India. So, I would say India is going to be low to moderately impacted from China becoming expensive in some of those low-end industries.

India’s position as a services exporter with some manufacturing is probably a better place to be in, if you are rising a little faster than the rest of Asia. India is not going to have an exportled growth like a small, open East Asian country. Big continental countries usually do not have export-led growth.

The government needs to pass the constitutional amendment required for the implementation of the goods and services tax (GST) and continue with structural reforms