India seems to be a clear beneficiary in terms of an attractive investment destination as investment opportunities drag for China, stated a research report by the State Bank of India (SBI). According to the report, India appears to be the greatest alternative, with favourable GDP and inflation forecasts for the current fiscal year.
Low mortgage rates, inexpensive unit pricing, and revived demand for homes, fuelled by the Coronavirus pandemic, were mentioned as important reasons for the housing sales boom in India.
According to the SBI report, the sale of 158,705 units during the first half of 2022 was 19% higher than the same period last year, growing by 60% YoY. It said that the total portfolio inflows since July 29 have already reached US$ 7.6 billion, compared to an outflow of US$ 14.7 billion in 2022-23 prior to July 29.
Commenting on China’s sliding construction sector, the SBI report said that as India’s eastern neighbour struggles with a meltdown in the sector, housing sales in India during the first half of 2022 i.e. between January and June, reached the highest level since the first half of 2013.
The research report further underlined the enthusiasm towards India by citing the recent example of “Apple’s recent move to shift part production of the iPhone 14 model for world-wide shipping from India, with a negligible time lag lag of a few weeks, post it’s slated launch on September 7, bears testimony to such optimism”.
“The move by Apple, the most recognisable face of tech-infused innovation in the last two centuries, that captures aspirations of an upwardly mobile population, should open the floodgates for other major conglomerates to follow suit,” the report said.
It also gave example of India’s equity and currency markets, which the report said, recovered after initially having reacted adversely to US Federal Reserve Chairman Jerome Powell’s comments reaffirming its (bank’s) commitment to frontload rate hikes by central banks, to recoup some of the losses in subsequent trades.
“Clearly, India seems to be enjoying the TINA (there is no alternative) factor, as globally all countries are facing the churn and India seems to be the best-placed jurisdiction in terms of growth and inflation outlook in FY23,” the report observed.
