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India Equity Thought Leadership: Transitioning to India’s next stage of growth

27 July 2023

Rana Gupta, Senior Portfolio Manager

Koushik Pal, Director, India Equities Research

India has been one of the best-performing regional equity markets over the past three years1. However, in today’s uncertain environment, investors are surveying the country’s growth trajectory to identify growth drivers that could create long-term opportunities. In an upcoming thought-leadership piece, Rana Gupta, Senior Portfolio Manager, and Koushik Pal, Director, India Equities Research, look at how the government’s structural reforms, introduced in 2014, gave rise to key growth drivers such as formalisation, the creation of digital and physical infrastructure, and domestic manufacturing incentives, joined forces to bolster India’s economic resiliency. They will also introduce the emerging "Four Ds" – Digitisation, Deglobalisation, Decarbonisation, and Demography – slated to transform India’s commercial environment.


Amidst a rapidly shifting landscape dominated by rising geopolitical tensions and shifting supply chains, India is also changing.

The country’s evolution since 2014 has already resulted in a paradigm shift driven by deliberate and targeted policies. The Indian economy embarked on a structurally transformative journey where a raft of critical policies, such as the JAM Trinity2, laid the foundation for a new economic direction. Indeed, the government-led reforms triggered a dynamic long-term growth trajectory driven by four key forces: formalisation, digitisation, public capex and domestic manufacturing incentives.

We believe that the interaction of these drivers has started to enhance India’s macroeconomic resilience with a more robust fiscal account and better external-account dynamics. The possibility of lower inflation should also reinforce the virtuous growth cycle. These developments should structurally transform the Indian economy, making it more formal, efficient, and resilient. It will also raise productivity and India’s ability to absorb more global capital.

And with these economic changes, the investment opportunity set has also evolved. Our thought-leadership piece will specifically look at the policies and reforms that were put in place and discuss the foundation that was built on the back of these policies, which resulted in India’s nascent growth. It will also provide greater detail on future drivers, explaining how the emerging forces of Digitisation, Deglobalisation, Decarbonisation, and Demography (the 4Ds) will reshape the country’s commercial environment across a diverse array of sectors.

The 4Ds will broadly cover:

  • How India’s improved digital and physical infrastructure, coupled with a more formalised economy, create new commercial opportunities.
  • How companies are building on these efficiencies as opposed to previously exploiting inefficiencies.
  • Why industry consolidation and economic disruption are simultaneously in play.
  • Where and why urbanisation is likely to deepen.
  • Identify areas of domestic manufacturing that will prosper.
  • Explain where India’s burgeoning middle class will spend their savings.

Given the current market and investment environment, we believe this timely piece should highlight how Indian equities may participate in the country’s long-term growth story amid policy continuity and a stable regulatory environment. While India’s equity markets are not immune to near-term volatility, over the medium to long term, in our view, this asset class presents potential growth opportunities, especially at an uncertain time when global growth and corporate earnings remain volatile.


Target release: end of August 2023



Bloomberg, as of 30 June 2023.

2 JAM stands for “Jan Dhan Yojana, Aadhaar and Mobile”, which is a government initiative to link Jan Dhan accounts, mobile numbers and Aadhar cards.


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