India’s macro fundamentals are well positioned for a multi-year improvement in economic output and earnings. Beyond the long-standing strength of its demographics, urbanisation and rising middle class, new factors are emerging that will accelerate investment opportunities in the country. Indian corporates have deleveraged and now sit on strong balance sheets, banks have strong capital adequacy ratios, and the government has plugged loopholes in the real estate sector. Future policy efforts should focus on green-field investments in newer sectors and industries and should propel the growth of corporate capital expenditure which has lagged in the past decade. The overall outlook for the next ten years is positive, but there are risks to be aware of, particularly regarding politics and policy, geopolitical developments and the evolution of commodity prices.

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