India’s economy could remain one of the fastest-growing in the world as foreign investors return and inflation pressures ease globally, according to Yetsenga.
Yetsenga said the global rate environment will continue to shape capital flows. The US Federal Reserve is expected to deliver a 25 basis points rate cut, but he noted this view developed recently. “Two weeks ago that wasn’t the case. The market was very much at sixes and sevens about what the Fed would do,” he added.
Sticky inflation around 3% and tariff challenges in the United States could delay deeper rate cuts until there is clearer evidence of cooling prices into 2026.
Yetsenga explained that India differs from other Asian economies because it does not have a trade agreement with the US. This lack of certainty may be one of the factors holding the markets in India back a little bit.
Even so, he expects stronger foreign portfolio investor (FPI) inflows next year. While the current market focus is the AI boom in the US, Korea, Japan, and Taiwan, he believes investor attention could shift.
“The Indian market comes back into its own,” he said, if expectations around AI growth become more realistic.
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Yetsenga said India’s recent gross domestic product (GDP) numbers confirm strong momentum. The real growth rate may be between earlier lower estimates and the recent 8% reading, but the performance remains strong in a weak global environment.
“Somewhere even below that is still I think a really solid outcome in a world which is really struggling for economic growth,” he noted, adding that this strength will remain “a feature of the Indian story in 2026.”
For the full interview, watch the accompanying video
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