A recent study by HSBC reveals that private sector companies in India are optimistic about demand conditions over the next 12 months. This positive outlook is driven by strong domestic demand, favourable demographics, and ongoing digitalisation efforts. The Indian economy is expected to continue its growth trajectory, supported by robust consumption patterns and a rising middle class. HSBC's findings align with its broader investment outlook, which highlights India as a key market with significant growth potential in 2025.
India's large and growing consumer base, coupled with a young demographic profile, is driving demand across various sectors. This domestic demand is expected to remain resilient, supporting business growth and investment.
The rapid adoption of digital technologies in India is enhancing efficiency and opening new opportunities for businesses. This trend is particularly evident in sectors like fintech, e-commerce, and IT services.
Ongoing reforms and policy initiatives are creating a conducive business environment, encouraging private sector investment and entrepreneurship. These efforts aim to improve infrastructure, simplify regulatory frameworks, and promote innovation.
HSBC maintains an overweight stance on Indian equities, viewing recent market pullbacks as opportunities to increase exposure. The bank expects India's growth to rebound, driven by strong economic fundamentals and a favourable business climate. Key sectors such as financials and industrials are seen as particularly promising due to their defensive nature and reasonable valuations. Additionally, HSBC is bullish on Indian local currency government bonds, anticipating them to outperform cash in the current market conditions.