India Fund

India’s self-reliance a buffer against rising commodity prices

Date: 28th Feb 2022 | Publication: Ausbiz

India has been heavily criticised in the West, after it abstained from voting on the draft UN Security Council Resolution against Russia’s invasion of Ukraine. But in the investing world, lots of traders are exiting the country’s stocks. So is this the time to dive in when others are panicking? Mugunthan Siva from India Avenue Asset Management says foreign investors have been in withdrawal mode, but this has been counteracted by increasing investment participation from domestic investors. He says this has significantly reduced the volatility of equity markets and increased the market breadth and participation. Mugunthan says the current geopolitical conflict will impact India less than many investors anticipate. He says India’s IT services exports for the first time now exceed India’s oil imports. He also says India’s increasing focus on renewable energy sources, recent free trade agreement with the Middle East and a greater focus on self-reliance should alleviate some of the stresses placed on the economy by rising oil and commodity prices.

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