macroeconomic framework

Falling exchange rate can curb imports more effectively than austerity measures. Don't intervene in forex market

Uday Kotak, founder of Kotak Mahindra Bank, urged India to reduce its reliance on foreign capital and cultivate a robust domestic pool of long-term risk capital for true self-reliance. He emphasized that companies should prioritize building businesses with a three-to-five-year vision over short-term stock price fluctuations, advocating for stronger domestic private equity and venture capital ecosystems.

India's economy is robust, capable of sustaining 7.5% growth with low inflation, according to RBI Deputy Governor Poonam Gupta. She highlighted strong remittances, services exports, and FDI as key strengths. Despite West Asia conflict concerns, she anticipates migrants returning and "revenge spending" boosting remittances.

Bees are vital pollinators, crucial for global food security and ecosystems, yet face severe threats from climate change, pesticides, and habitat loss. Their declining populations, particularly in India, signal a critical ecological crisis. Urgent action is needed from farmers and citizens to protect these essential insects.

The Indian rupee is facing significant pressure, weakening against the US dollar due to soaring crude oil prices driven by Middle East geopolitical tensions and persistent foreign fund outflows. Despite India's robust economic growth, the currency's slide continues as the Reserve Bank of India intervenes to curb volatility rather than target a specific exchange rate.

US President Trump's second term prioritizes oil, leveraging energy dominance for global influence. Campaign funding from oil interests aligns with policies boosting domestic production and easing regulations. Sanctions on rivals and geopolitical events like the Hormuz crisis engineer demand for American exports, impacting nations like India and reshaping global energy markets.

India's Securities and Exchange Board of India chairman Tuhin Kanta Pandey assured global investors of the nation's open and attractive investment landscape. He highlighted strong macroeconomic fundamentals, a growing investor base, and reform-driven policies at a Silicon Valley session. Recent steps to ease FPI registration and digital platform growth were also emphasized.

Morgan Stanley believes the Sensex has the potential to reach 95,000 by December 2026, with its strategist Ridham Desai indicating that Indian equities may be entering a fresh bull phase after enduring one of their weakest periods of relative performance in decades

India’s balanced geopolitical approach has helped mitigate risks. Strong relationships across key global blocs have enabled continued access to energy and trade routes, positioning India relatively well in a fragmented global environment.

Finance Minister Nirmala Sitharaman highlighted India's strong debt management, with an 81% debt-to-GDP ratio, positioning it favorably among major economies amidst global economic volatility. The ongoing Middle East conflict poses a systemic threat to global energy, impacting supply chains and economic stability, while the RBI's MPC begins deliberations amid inflation concerns.

Fundamentally, foreign exchange reserves tell us about a country’s ability to service its external debt. The more robust the cover, the better a country’s position of economic strength. So how strong is India placed in terms of foreign exchange reserves?

Prime Minister Narendra Modi is set to attend the G7 summit in France from June 15-17. This confirmation came during high-level talks where India's crucial role in addressing global economic issues and fostering solidarity was highlighted. Discussions also centered on the Middle East, with both nations agreeing to coordinate on securing the vital Strai of Hormuz.

On most days, India's economic heartbeat is invisible. It does not pulse through stock exchanges or policy corridors but across vast, restless waters where ships move quietly between continents. Yet, when conflict erupts in narrow choke points like the Strait of Hormuz, that invisible system becomes the country’s most visible vulnerability. The ongoing tensions have done exactly that, forcing India to confront a reality it has long managed but rarely foregrounded.

The selloff by foreign institutional investors (FIIs) has been particularly pronounced. Rupee has seen its worst financial year in over 14 years, breaching the 95 per dollar mark in trade on the last trading day (March 30) of the fiscal year.

Despite strong economic and social indicators, Tamil Nadu's fiscal health has declined, dropping to 13th in NITI Aayog's Fiscal Health Index. The state's expenditure on growth and welfare, coupled with rising debt, has led to emerging fiscal pressures, impacting its financial stability and potential central tax devolution.