“With this 0.3% inflation that came out for October, I’m sure the noise for a 50-bps rate cut will become louder,” Gupta said. However, he added that “even now, headline inflation will be back to 3.5–4% by the first quarter of the financial year 2026-27 (FY27).” Gupta said inflation is likely to remain below 1% in November, which would be the first such trend since 2000.
On growth, Gupta said India’s nominal gross domestic product (GDP) is expected to grow 8.4% this year and around 9.5% next year, marking the third consecutive year of sub-10% growth. “We are now a $4 trillion economy, the fifth largest in the world,” he said. “The bigger we become, the harder it is to sustain double-digit growth.”
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Vikas Kumar Jain, Head of India Research at CLSA, noted that India’s stock market has lagged global peers despite being one of the most consistent performers over the past two decades. “India is one of the few markets that made a new high in 19 out of the last 25 years,” he said, adding that recent underperformance was due to trade and geopolitical concerns.
He expects the situation to improve as India–US relations stabilise and earnings growth recovers. “Headline news flow is important,” Jain said. “If that starts improving, then the long-term growth story can come back.”
On global risks, both economists discussed the impact of artificial intelligence. Gupta said AI-led productivity growth in developed economies could reshape job markets. “India still needs seven to eight million jobs a year,” he said, adding that domestic companies must stay competitive as global firms adopt new technologies.
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Jain added that India’s young population could help it adapt quickly to emerging technologies. “We are great adopters — whether it was 4G or digital payments,” he said. “AI could follow a similar path for India in the years ahead.”
For the full interview, watch the accompanying video
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