India should grow 7.6%, with higher trade risk

India’s economy is projected to sustain a 7.6% growth rate in both fiscal years 2016-17 and 2017-18,” according to a year-end report issued by the United Nations (UN). On this occasion, Cyceon reminds a previous assessment saying that India’s economic future somehow depends on China’s, given that it would be difficult if not impossible for such a large economy to escape the fallout of any durable slowdown or crisis of the Chinese economy.

The Chinese economy will grow just 6.4% in 2017, lower than the 6.5-6.7% official forecast, the report said, and considering the sluggish growth seen elsewhere particularly in Europe, India and China appear as two stable beacons of growth for global economy.

However, investing in India will likely be a challenging task if the Trump administration does review the United States foreign trade policy as extensively as it said it would. Also, Prime Minister Narendra Modi seems to have greater difficulty than expected in implementing his pro-business reforms, that’s why political risk both external and internal will be a major data to keep an eye on throughout 2017.