How to profit from India's volatility

INDIA

High oil prices and inflation will put pressure on India's economy but these obstacles could mean opportunities for investors. Roshan Padamadan, investment director, India at HSBC Global Asset Management, explains why.

Few can doubt that rising consumer spending is, and will be, India’s primary economic driver going forward given its population is some 1.2 billion and rising. In fact estimates from the OECD assert that potential growth in India is now nearly 9% and that income per capita has doubled in just over the past decade. India’s economy however pulled back recently (Q4 2011 figures came in at 6.1%). This represents a slowdown from the heady figures of GDP growth in 2010 and 2011 – 9.9% and 7.4% respectively – but it is nowhere close to stall speed. We expect rate cuts in 2012 to bolster gro...