Foreign investments in India expected to rebound soon

Foreign investment in India is expected to rise again as the country remains the fastest-growing economy, according to Santosh Rao from Manhattan Venture Partners. Despite better opportunities elsewhere at the moment, he believes foreign investors will return to India in time. Rao predicts that the US Federal Reserve will likely cut interest rates once this year, with more cuts expected next year as the US economy may slow down. Currently, prices in the US remain high, and inflation is a concern. Recent retail sales figures showed a slower increase than expected, raising caution among consumers. He notes that US consumers are becoming more careful with their spending due to fears of inflation and upcoming tariffs. While sales data is softening, customers are still buying, but there is uncertainty about the future. Companies are also anxious about how the economy will develop. Rao emphasizes that despite foreign funds currently being diverted to other emerging markets like China, India’s strong economic fundamentals will eventually attract these investments back. He acknowledges that while the immediate focus is on better returns elsewhere, the long-term outlook for India is positive. As for the upcoming Fed decision, Rao doubts there will be multiple rate cuts this year due to ongoing inflation concerns. He suggests a cautious approach from the Fed, waiting to see how fiscal policies unfold while acknowledging the pressures from tariffs. Rao believes that while tariffs may initially raise prices, they could lead to a fairer trade landscape in the long run. He thinks the economic strategies being implemented could have positive effects down the line, supporting both growth and consumer spending. Overall, he sees the potential for adjustment and adaptation in response to these changes.