FII Alert! Advantage India in escalating Sino-US trade war
The US-China trade war can provide Modi 2.0 government an opportunity to promote India as an investment destination on the face of rising obstacles of tariff increases by the US on China.
On account of the escalating Sino-US trade war, there is an opportunity for the Indian economy to gain in the misses of the Chinese economy. Investments and the market experts are of the opinion that in the wake of China-US trade standoff, foreign investors may fish out their money pumped in China and park them in India, provided the Modi 2.0 government is able to control the geopolitical challenges emerging in the Middle East and another Gulf region.
Dharmesh Kant, Head of Retail Research at IndiaNivesh Securities said, “The US-China trade war can provide the government with a rare opportunity to promote India as an investment destination on the face of rising obstacles of tariff increases by the US on China. As expected, markets have cheered Modi's comeback, a sign that foreign and domestic investors alike view him as a strong leader. We expect the markets to continue to be bullish going forward this year. From here on, any meaningful correction on the backdrop of global volatility will be lapped up by markets. Our advice is to buy corrections and stay invested.”
Dharmesh Kant further adds that on the international front, Modi government's immediate task would be to deal with the rising tension in the Persian Gulf. As a waiver for sanctions from buying Iranian oil ends, India has to find other sources while making sure neither the US nor Iran gets irked by Indian actions.
Prakash Pandey, Head of Research at Fairwealth Securities said, "Escalating Sino-US trade standoff is an opportunity for the Indian economy because, in the wake of lower bond yield in the developed economies, FIIs have remained focused on the emerging economies where India and China lead the race. Since China-US trade war has put some doubt into the FIIs mind, they may fish out their money from the Chinese market and park them in the Indian markets, especially in the equity and bond markets."
So, it's up to the Modi 2.0 government as to how they are going to handle this global standoff and make it a fortune for the Indian economy.