India Investment Strategy.

In most parts of the world and particularly in India, 2006 has been an extremely good year on the macro front. We have entered 2007 with greater uncertainty on global growth front. However, as far as India is concerned, while we expect some softening from the very strong gains made in 2006, both in terms of GDP and stock market, we expect the year to yield a satisfactory outcome.



~Despite considerable slowdown in G-3, strong domestic demand would make growth moderation in India modest
~Fiscal correction on track but concerns remain
~Slowdown in domestic credit coupled with deceleration in foreign inflows could result in continuation of tight liquidity especially on the short end
~Sensex PEG has remained at comfortable level, despite strong gains in valuation multiples
~The appreciation of rupee against US dollar is unlikely to adversely affect India’s goods and services exports