Is India vulnerable to an investment capital crash?

The risk is growing, warns Morgan Stanley, if India continues on its reckless spending path.

The Reserve Bank of India has announced fresh purchases of billions in government securities, which will put added pressure on the country's balance of payments.

When coupled with stabilizing measures for the rupee currency, this move could leave India "exposed" to slower capital inflows and a higher domestic cost of capital -- consequences that the government can curtail with more prudent spending.

Here's more from Morgan Stanley:

As we have been highlighting, the risk of balance of payments (BOP) stress remains high. Unless the government initiates major policy action to cut its spending (including subsidies) and/or international crude oil prices decline sharply due to improved outlook of global supply soon, India will remain exposed to any potential slowdown in capital inflows – increasing pressure on the exchange rate, which in turn would keep the domestic cost of capital high.

Also Read

Singapore ranks second in global economic freedom

Economists forecast modest NODX growth for Singapore in 2024

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit