Chief Economist & Political Strategist, CrossASEAN Research

Prasenjit K. Basu

Chief Economist & Political Strategist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Macroeconomics

<ul>
<li>RBI kept the policy rate unchanged and retained a neutral policy stance. But (in concert with MoF), a more conducive climate was created for foreign inflows into India's debt markets.  </li>
<li>Real GDP grew 7.8%YoY in Q4/FY26 with a current account surplus (0.7% of GDP). Our forecast for core CPI inflation is 4.2%, headline 4.8%, and no rate hikes in FY27.</li>
<li>With services (52% of the economy) growing 9%+, we expect real GDP to grow 7.3% in FY27, and strong net FDI and FPI inflows to bolster INR. Bullish. </li>
</ul>


RBI kept the policy rate unchanged and retained a neutral policy stance. But (in concert with MoF), a more conducive climate was created for foreign inflows into India's debt markets.  
Real GDP grew 7.8%YoY in Q4/FY26 with a current account surplus (0.7% of GDP). Our forecast for core CPI inflation is 4.2%, headline 4.8%, and no rate hikes in FY27.
With services (52% of the economy) growing 9%+, we expect real GDP to grow 7.3% in FY27, and strong net FDI and FPI inflows to bolster INR. Bullish. 


India: No Rate Hike in FY27, as Growth Slows a Tad and CAD Widens to 1% of GDP

<ul>
<li>With the goods trade deficit narrowing in Jan-Apr'26, the CAD will likely be only 0.6% of GDP in FY26, likely widening only a bit to 1% of GDP in FY27.</li>
<li>INR's REER has depreciated 15% in the past 18 months, primarily because of net capital outflows (not the small CAD). RBI sold INR in Jan-Feb'26, thus exaggerating subsequent war-driven depreciation.  </li>
<li>With net FPI inflows set to be positive in H2CY26, we expect INR to rebound to INR93/USD by end-'26, and a 10% rebound in Indian equities as RGDP accelerates. </li>
</ul>


With the goods trade deficit narrowing in Jan-Apr'26, the CAD will likely be only 0.6% of GDP in FY26, likely widening only a bit to 1% of GDP in FY27.
INR's REER has depreciated 15% in the past 18 months, primarily because of net capital outflows (not the small CAD). RBI sold INR in Jan-Feb'26, thus exaggerating subsequent war-driven depreciation.  
With net FPI inflows set to be positive in H2CY26, we expect INR to rebound to INR93/USD by end-'26, and a 10% rebound in Indian equities as RGDP accelerates. 


India: INR and Equities Under-Valued, with Small CAD, and EPS Set to Accelerate

<ul>
<li>Hurt by soaring US import tariffs in Aug'25-Mar'26, India's goods exports grew just 0.9% in FY26, while imports (bolstered by higher prices) grew 6.5%, widening the trade deficit to US$333bn.</li>
<li>Services exports have continued strongly outpacing imports. For the year to Feb'26, services imports grew 4%, services exports +9.6% and the services-trade surplus widened 16% to US$214bn.  </li>
<li>With an incomes surplus of US$100bn+ likely, the CAD is likely to be 0.5-0.6% of CAD in FY26, widening to 1% of GDP in FY27 amid higher crude oil prices. </li>
</ul>


Hurt by soaring US import tariffs in Aug'25-Mar'26, India's goods exports grew just 0.9% in FY26, while imports (bolstered by higher prices) grew 6.5%, widening the trade deficit to US$333bn.
Services exports have continued strongly outpacing imports. For the year to Feb'26, services imports grew 4%, services exports +9.6% and the services-trade surplus widened 16% to US$214bn.  
With an incomes surplus of US$100bn+ likely, the CAD is likely to be 0.5-0.6% of CAD in FY26, widening to 1% of GDP in FY27 amid higher crude oil prices. 


Higher Import Prices and Modest Export Rebound to Push CAD to 1% of GDP in FY27

<ul>
<li>The new GDP series shows slightly less-strong but stabler growth over the last three years. Real GDP grew 7.8%YoY in Q3/FY26, and 7.6%YoY in Apr-Dec'26 led by 7.7%YoY PCE growth.</li>
<li>Manufacturing has been the standout performer in the new series, outpacing the much larger Services sector (which has also grown 10%+). Higher crude oil prices will erode RGDP/industrial growth. </li>
<li>Assuming war persists through Apr'26, crude prices are likely to be above US$100/bbl in Apr-Jun'26, averaging US$85/bbl in FY27. We expect RGDP growth of 7.2%YoY in Q4/FY26, 7% in FY27. </li>
</ul>


The new GDP series shows slightly less-strong but stabler growth over the last three years. Real GDP grew 7.8%YoY in Q3/FY26, and 7.6%YoY in Apr-Dec'26 led by 7.7%YoY PCE growth.
Manufacturing has been the standout performer in the new series, outpacing the much larger Services sector (which has also grown 10%+). Higher crude oil prices will erode RGDP/industrial growth. 
Assuming war persists through Apr'26, crude prices are likely to be above US$100/bbl in Apr-Jun'26, averaging US$85/bbl in FY27. We expect RGDP growth of 7.2%YoY in Q4/FY26, 7% in FY27. 


India: Revised GDP Series' Strong but Stabler Growth; but Oil to Hurt in FY27

<ul>
<li>Fiscal deficit likely 4.2% of GDP (helped by 31.6%YoY corporate-tax growth Oct-Dec'25), with real GDP growing 8.5% (and nominal GDP 9.2%) in FY26 aided by stronger PCE growth post-GST cuts.</li>
<li>Actual deficits and government's market borrowing in FY27 will likely be much lower than official projections, so any sell-off in bonds provide a buying opportunity. </li>
<li>The EU will cut 4-26% tariffs on a slew of labour-intensive imports to zero as soon as the India-EU FTA comes into force, thereby substantially boosting those employment-intensive sectors. </li>
</ul>


Fiscal deficit likely 4.2% of GDP (helped by 31.6%YoY corporate-tax growth Oct-Dec'25), with real GDP growing 8.5% (and nominal GDP 9.2%) in FY26 aided by stronger PCE growth post-GST cuts.
Actual deficits and government's market borrowing in FY27 will likely be much lower than official projections, so any sell-off in bonds provide a buying opportunity. 
The EU will cut 4-26% tariffs on a slew of labour-intensive imports to zero as soon as the India-EU FTA comes into force, thereby substantially boosting those employment-intensive sectors. 


India: EU FTA, US Tariff Reductions Dovetail with Budget's Manufacturing Focus

India

iShares MSCI India Index ETF is an exchange-traded fund registered in Singapore. The Fund seeks to provide investment results that, before expenses, closely correspond to the performance of the MSCI India Index. The Fund invests all or substantially all of its assets in shares comprising the MSCI India Index in substantially the same weightings as constituted in the underlying index.

iShares MSCI India Index ETF (INDIA SP)

India: No Rate Hike in FY27, as Growth Slows a Tad and CAD Widens to 1% of GDP

RBI maintains policy rate, focuses on attracting foreign inflows to debt markets. With Services growing 9%, RGDP to grow 7.3% in FY27, as...

Prasenjit K. Basu

India: INR and Equities Under-Valued, with Small CAD, and EPS Set to Accelerate

Smaller trade deficit in Jan-Apr'26 likely kept CAD at 0.6% of GDP in FY26, widening slightly to 1% in FY27. INR's REER fall caused by net FPI...

Prasenjit K. Basu

Higher Import Prices and Modest Export Rebound to Push CAD to 1% of GDP in FY27

India's goods exports struggle due to US tariffs, while services exports continue to outpace imports, leading to a widening trade deficit and but...

Prasenjit K. Basu

India: Revised GDP Series' Strong but Stabler Growth; but Oil to Hurt in FY27

New GDP series shows stable accelerating growth, led by manufacturing. War to keep crude prices above $100/bbl in Apr-Jun'26. RGDP growth expected...

Prasenjit K. Basu

India: EU FTA, US Tariff Reductions Dovetail with Budget's Manufacturing Focus

Fiscal deficit expected to be 4.2% of GDP in FY26, aided by strong GDP growth. Buy bonds into weakness. EU's immediate elimination of 4-26% tariff...

Prasenjit K. Basu

India: No Rate Hike in FY27, as Growth Slows a Tad and CAD Widens to 1% of GDP

​RBI maintains policy rate, focuses on attracting foreign inflows to debt markets. With Services growing 9%, RGDP to grow 7.3% in FY27, as...

Prasenjit K. Basu

India: INR and Equities Under-Valued, with Small CAD, and EPS Set to Accelerate

​Smaller trade deficit in Jan-Apr'26 likely kept CAD at 0.6% of GDP in FY26, widening slightly to 1% in FY27. INR's REER fall caused by net FPI...

Prasenjit K. Basu

Higher Import Prices and Modest Export Rebound to Push CAD to 1% of GDP in FY27

​India's goods exports struggle due to US tariffs, while services exports continue to outpace imports, leading to a widening trade deficit and but...

Prasenjit K. Basu

India: Revised GDP Series' Strong but Stabler Growth; but Oil to Hurt in FY27

​New GDP series shows stable accelerating growth, led by manufacturing. War to keep crude prices above $100/bbl in Apr-Jun'26. RGDP growth expected...

Prasenjit K. Basu

India: EU FTA, US Tariff Reductions Dovetail with Budget's Manufacturing Focus

​Fiscal deficit expected to be 4.2% of GDP in FY26, aided by strong GDP growth. Buy bonds into weakness. EU's immediate elimination of 4-26% tariff...

Prasenjit K. Basu

RBI maintains policy rate, focuses on attracting foreign inflows to debt markets. With Services growing 9%, RGDP to grow 7.3% in FY27, as...

Smaller trade deficit in Jan-Apr'26 likely kept CAD at 0.6% of GDP in FY26, widening slightly to 1% in FY27. INR's REER fall caused by net FPI...

India's goods exports struggle due to US tariffs, while services exports continue to outpace imports, leading to a widening trade deficit and but...

New GDP series shows stable accelerating growth, led by manufacturing. War to keep crude prices above $100/bbl in Apr-Jun'26. RGDP growth expected...

Fiscal deficit expected to be 4.2% of GDP in FY26, aided by strong GDP growth. Buy bonds into weakness. EU's immediate elimination of 4-26% tariff...