🛒 India: World's next big consumer market

Good morning and happy Friday. Happy Holi to all those celebrating ❣️ 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 🛒 India: The World's next big consumer market

• 🪠 Indian IT stocks plunge

• 🗞️ Bite-sized summaries

  • 🍷 Tariff wars continue

  • 🇷🇺 Ceasefire

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian markets closed mixed. Realty stocks were hit hardest, mid and small-cap indices also declined, reflecting overall market weakness.

🌍️ International

• Back in the red. The sell-off was driven by Trump's escalating trade conflicts, fears of a government shutdown, and concerns over slowing economic growth which triggered broad-based selling, particularly in tech stocks.

CONSUMER

🛒 India: The World's next big consumer market

India is on the brink of becoming the most sought-after consumer market globally, according to a recent Morgan Stanley report.

With a projected GDP growth of 6.3% in FY2025 and 6.5% in FY2026, the country is set to solidify its position as a key economic player.

Several factors contribute to this growth trajectory, including strong macroeconomic stability, fiscal and monetary support, rising service exports, and a growing entrepreneurial ecosystem.

Key growth drivers

1. Rising domestic demand: Urban consumption is set to increase, fueled by income tax cuts and higher disposable incomes, while rural demand remains steady.

2. Public and Private investments: Government-led capital expenditure and increasing household investments are expected to drive economic expansion, with private corporate investments gradually picking up.

3. Manufacturing & services expansion: India's manufacturing sector is gaining momentum, while service exports are contributing significantly to job creation and economic resilience.

4. Favorable monetary & fiscal policies: The Reserve Bank of India's accommodative stance and government-led fiscal policies aim to sustain growth while keeping inflation and fiscal deficit in check.

What does this mean for India?

As India cements its position as a global consumer hub, the economic landscape presents multiple opportunities. Increased consumption and investment will create jobs, enhance living standards, and foster innovation. The stock market outlook remains positive, with financials, consumer discretionary, industrials, and technology sectors poised for growth.

However, external risks such as geopolitical tensions, global trade policies, and interest rate movements in the U.S. could pose challenges. Yet, India's resilience, supported by strong fundamentals, provides confidence in its long-term economic trajectory.

Overall: With inflation projected to remain stable and the current account deficit staying under 1% of GDP, India's economic outlook remains strong. As 2025 unfolds, the country is well-positioned to reclaim its place among the leading emerging markets, making it a focal point for global investors and businesses alike.

Read more: Economic Times

MARKETS

🪠 Indian IT stocks plunge

India’s IT sector is facing significant turbulence, with eight of the top ten IT stocks entering bear market territory.

Companies like Infosys, HCLTech, and Tech Mahindra have seen their stock prices fall by up to 33% from their peaks.

The BSE IT index itself has dropped 19% since January 2025, reflecting widespread concerns about the sector’s future.

Here’s what might be happening:

1. US recession fears: The Indian IT industry heavily relies on the US market. With JP Morgan estimating a 40% chance of a US recession in 2025, investors fear reduced tech spending from American clients.

2. Geopolitical tensions & tariffs: US President Donald Trump has imposed hefty tariffs on Chinese, Canadian, Mexican, and European imports. India's exports to the US could also be affected, creating further uncertainty.

3. Stock market selloff: The Nasdaq’s recent 4% drop, leading to over $700 billion in losses for top tech firms, has fueled a negative sentiment around IT stocks globally.

4. Revenue growth projections lowered: Morgan Stanley has cut its revenue growth forecast for Indian IT firms, now expecting only 4.5% growth in FY26 and 6% in FY27. Additionally, it has downgraded Infosys and reduced target prices for TCS, Infosys, and HCLTech.

The IT sector is a major contributor to India's GDP and employment. A prolonged downturn could impact job creation, salary growth, and investor confidence. Companies may need to diversify their client base, explore new markets, and invest in AI-driven efficiencies to counter slower revenue growth.

Looking ahead: India’s strong digital economy and growing domestic demand could provide some cushion. Government initiatives supporting technology-driven industries may also help mitigate risks.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🍷 Tariff wars continue - U.S. President Donald Trump has threatened a 200% tariff on all wines and alcoholic products from the EU if the bloc does not remove its 50% tariff on whiskey. Trump called the EU’s tariff “abusive” and said his move would benefit U.S. wine and champagne businesses. The EU plans to impose counter-tariffs on $28 billion worth of U.S. goods in response to earlier U.S. steel and aluminum tariffs. While the EU remains open to negotiations, tensions are rising. European spirits stocks dropped, and U.S. stock futures fell as the trade dispute escalates.

🇷🇺 Ceasefire - Russia has agreed to discuss a U.S.-proposed 30-day ceasefire in Ukraine after high-level talks. U.S. President Donald Trump emphasized peace but warned of financial measures if Russia refuses. Russian officials confirmed they are open to talks, with negotiations possibly starting soon. Ukraine has accepted the ceasefire but remains skeptical of Russia’s intentions. U.S. officials, including National Security Adviser Mike Waltz, are set to visit Russia. Meanwhile, fighting continues, with Ukraine suffering heavy losses and Russia claiming to have shot down 77 Ukrainian drones. The situation remains tense as both sides weigh their next moves.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• iRobot tells investors its future is in doubt.

• Amazon, Google and Meta support tripling of nuclear capacity by 2050.

• Philippine ex-leader Duterte is being flown to The Hague to face charges of crimes against humanity.

• What to know about the collapse of Portugal’s government.

• 'Stranded' astronauts' return delayed after SpaceX launch postponed.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Winona Ryder, Johnny Depp appear in first look at Tim Burton doc.

• Brad Pitt’s F1 trailer out now.