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According to Mitul Kotecha, senior emerging markets strategist at TD Securities, thinks that India”s Union budget bodes well for markets and the fact that the FY 2020 target was narrower than feared is a welcome development and while there may be some doubts on the ability to achieve this, the measures outlined to raise revenues look credible.

Key Quotes

“The decision to sell bonds overseas is a double edged move. It opens up more vulnerability to foreign investor gyrations but will also be seen as a welcome move in term of generating greater revenues, and widening the investor base to limit any supply overhang, while supporting bonds and INR.”

“There is clearly a lot of emphasis aimed at foreign investors. Implementation risks remain but if the measures announced are carried out, it would likely help to fuel stronger foreign investment inflows, helping India to close at least some of the large gap with China in this respect.”