New Delhi: Markets have a mind of their own and their reaction to events is strange and unpredictable. The Israel-Hamas war began almost a fortnight back and markets reacted adversely on Monday (October 9) the first day they opened after the event to only bounce back more strongly on Tuesday.
Things seemed to be going well when the skirmish flared up and it now portends to be a religious war of sorts panning out. It’s the Muslim brotherhood versus Jews and Christians. Most unfortunate.
The combined casualty figure has crossed 5,000 and the region seems headed for a bloody war. What would be the end outcome? Almost difficult to predict, but will take a huge toll of human lives.
Markets are worried about things happening currently. In deference to the Muslim brotherhood some of the oil producing states have ensured that oil starts to boil, leading to global uncertainty and bringing the fragile economies of Europe to a virtual stop. India was a stand out economy but has taken a backseat with oil where it is. How much we could bear is not a quantifiable amount but such a situation cannot last forever.
Our markets have weathered many storms in the recent past and the economy has stood out. Some of the key reasons for the strength are the fact that we have a stable government in place which is doing work in key areas of infrastructure, roadways, ports, railways and telecom.
More importantly the never ending paper work has been reduced significantly and things have become easier to manage. All this has encouraged investments in the country from all over. We are being considered by many as a viable alternative to China for setting up manufacturing facilities. While a lot has been done there is scope for much more to be done going forward.
India is by and large an agrarian economy which has learnt the hard way to generate precious foreign exchange from software services and also diamond cutting and polishing.
Going forward the proliferation of lab grown diamonds would be another opportunity for the country to earn foreign exchange as the entire value chain is captured in the country. The next gen is enamoured by the lustre and sparkle of these diamonds which come at prices which are simply too good.
Our country has the ability to bounce back from all hurdles and time and again India Inc has risen as one to face any challenges. The ability of the government of the day to fall on its people to deliver makes India one shining example of resilience and deliverance.
Currently the US is worried about rising inflation and interest rates which have reached levels not heard of in the last 20 plus years. For interest rates to plateau and start coming off could be a long way off. European countries Germany and the UK seem to have gone into recession and are fighting for revival and survival. In many other parts of the world too, things are not hunky dory.
Over the next six months things in India too will be vulnerable as the nation first witnesses state elections and then general elections in April-May 2024. This would be a period of uncertainty where crude could be a big dampener and the weakening rupee could hit us badly.
One thing that stands out for India is the never give up attitude of its businessmen and I am talking not of the large business houses but the MSME segment as the bulk of India’s business is from this segment. Innovation, delivery, reliability and dependability are some of the key attributes this sector enjoys. This according to me is India’s key strength and is something that can never let the country down as the sheer numbers abound here.
Numbers favour India as an economy which has stood the test of time in adverse conditions. It appears the world is once again trying to test the country and its perseverance to rebound from one more crisis.
(IANS)
