Can India Lift Nominal Growth To 12% Amid West Asia Crisis? - Morgan Stanley Weighs In

Amid the ongoing global crude oil crisis, earnings growth has turned after a six-quarter mid-cycle slowdown and is expected to grow further, according to a Morgan Stanley report.

This growth would be aided by reflationary policies of the RBI and the government via "rate cuts, bank deregulation and liquidity infusion, strong capex trends in energy, defence, semiconductors, fertilisers and data centres among others, large tax cuts and relatively stimulating fiscal."

On other hand, India's oil intensity is a lot lower than previously, however, the South Asian country still needs to import oil.

“The lack of a direct AI play seems to be the most persistent challenge to the equity market, with potential AI disruption for Indian services exports aggravating matters,” it said. 

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Looking beyond such challenges, Morgan Stanley expects "India to be a big gainer in a multi-polar world, with manufacturing share in GDP likely to rise in the coming decade."

Further, it noted that India's key leverage is its growing consumer base, with rising incomes of a relatively young population.

In 2025, India made up for “18% of global GDP growth”, a number that is likely to be higher in the coming years.

Currently, India is one of the fastest growing places for energy infrastructure and this could fuel a boom in data centres.

Meanwhile, the centre has elevated both petrol and diesel rate by Rs 3, respectively. 

Speaking on the hike in fuel prices, Arvind Kumar, Director (Refineries), IOCL, noted “it is a very small rise," as per an ANI report. 

“It’s a very small rise, and you know a lot of pressure is there. But I can tell you that Indian Oils Group companies, 10 refineries are working round the clock and more than 100 % capacity so that there will be no crisis, no dry out at any of our retail outlets....let us come together to save fuel and in this emergency time and this critical time," he said.