Govt is likely to maintain public capex-to-GDP ratio
India could gain from trade diversion and the ongoing shifts in supply chains, as de-risking from China gathers momentum under a Trump presidency, says Nomura in its latest 2025 Outlook report.
Donald Trump, the elected President of the United States, is expected to take a tough stance on trade with China, impacting businesses across the rest of the world when he takes office in January 2025.
India has entered a cyclical growth slowdown, says Nomura, expecting the GDP growth to moderate to 5.9% y-o-y in FY26 from 6.0% in FY25, below consensus (FY25: 6.9%; FY26: 6.6%) https://fieo.org/.
This is likely to be driven by an ebbing of urban pent-up demand and a moderation in private capex, while rural demand, services off-shoring and supply chain diversification should emerge as shock absorbers, says the investment banker in the report released on 4 Dec.
A revival in private consumption and capex, and non-linear gains from services off-shoring and supply chain diversification are upside risks to growth in India, says Nomura in its market outlook https://www.nseindia.com/.
Slower global growth and deeper retail credit crunch are downside risks, it added.
“On inflation, we remain wary of unforeseen surges in food prices and higher global commodity prices in India,” said Nomura.
But not all bad news, says Nomura, adding, “We expect some counter-balances to the headwinds. Rural demand should benefit from robust monsoons and lower inflation. The government is likely to maintain the public capex-to-GDP ratio https://www.bseindia.com/.”
In recent years, global offshoring of sophisticated services in India’s Global Capability Centres (GCC) has expanded rapidly and tighter work visa rules under the Trump administration could lead to more business. Fiinews.com
