Navigating Global Headwinds: Infomerics Ratings’ Shubham Jain on India’s Economic Future
Shubham Jain, Group CEO of Infomerics Valuation and Ratings, shares his insights on India’s growth outlook, investment trends, and key sectors set to benefit from long-term shifts
- Jul 14, 2025,
- Updated Jul 14, 2025 5:27 PM IST
As Indian economy faces global challenges such as geopolitical tensions, rising commodity prices, and shifting capital flows, questions around economic strength and sectoral opportunities are more relevant than ever. In an exclusive interaction with Business Today, Shubham Jain, Group CEO of Infomerics Valuation and Ratings, offers data-backed insights on the country’s growth outlook, investment sentiment, fiscal strategy, and the sectors likely to gain from long-term structural changes.
How do you see India’s economic growth over the next 12 to 18 months, given the global challenges?
India's economy is expected to grow at a rate of 6.3% to 6.8% in the next 12 to 18 months. This growth will be driven mainly by strong domestic consumption and government-led infrastructure spending. Favourable early kharif sowing data and a good monsoon outlook support the agricultural sector, though climate risks remain. According to NSO estimates, GDP growth for Q4 FY25 stood at 7.4%, and for the full year at 6.5%. However, global uncertainties—such as geopolitical tensions, trade disruptions, and weather risks—could pose downside risks.
What are the key factors slowing down private sector capital investment?
Private Capex still faces hurdles such as weak demand, delays in project execution, and global trade uncertainties. In Q4 FY25, many listed firms reported slower earnings growth, with manufacturing and financial services seeing pressure on margins. Industrial growth (IIP) slowed to 1.2% in May 2025, with mining and electricity showing negative growth. Consumer demand—especially for non-durables—remains subdued, contributing to cautious investment sentiment.
Do you expect private sector investment (capex) in India to pick up meaningfully going forward?
Yes, private capex has been rising steadily. According to a government survey, aggregate capex increased by 66.3% between FY22 and FY25, led by manufacturing, which accounted for 43.8% of the total in FY25. RBI data also shows improving capacity utilization, and capital goods output has picked up. While firms remain cautious due to global uncertainties and interest rates, around 30% plan to invest in upgrades, indicating continued momentum into FY26.
How do you view the government’s spending and infrastructure push, especially in terms of balancing economic growth with fiscal discipline?
The government continues to push infrastructure investment while maintaining fiscal discipline. The FY26 Budget allocated Rs 11.21 lakh crore to infrastructure, slightly up from the previous year. The fiscal deficit is targeted to reduce to 4.4% of GDP in FY26, helped by the RBI’s record Rs 2.69 lakh crore dividend and higher non-tax revenue. GST collections also hit a record Rs 22.08 lakh crore in FY25, reflecting strong compliance and a growing taxpayer base. These trends indicate that the government is managing growth and fiscal consolidation in a balanced way.
Which sectors or investment themes do you think will benefit from the ongoing long-term changes in India’s economy?
Sectors like infrastructure, renewable energy, healthcare, defence, and fintech are likely to benefit from long-term shifts in India’s economy. These are being supported by government initiatives, increased urbanization, rising digitization, and changing geopolitical priorities.
After the recent volatility in energy prices, if crude oil prices rise further, which sectors in India are likely to be affected the most?
Higher crude oil prices will impact sectors such as paints, aviation, fertilisers, automobiles, petrochemicals, and tyres. The paint industry, for example, relies heavily on Titanium Dioxide, a crude derivative, which can form up to 50% of its input costs. Tyres, plastics, and inks also depend on crude-based carbon black.
Rising aviation fuel prices will affect airline margins, while packaging costs in FMCG and input costs in cement and steel may also rise. Although upstream oil companies could gain, oil marketing firms may face margin pressure if price hikes cannot be passed on. EVs may benefit relative to internal combustion vehicles, and fertilizer costs may increase due to expensive LNG.
How could the global slowdown and geopolitical issues like tensions in the Middle East and the Russia-Ukraine conflict, affect India’s economy and capital flows?
Global tensions can disrupt supply chains and raise raw material prices, leading to inflationary pressures. Foreign Portfolio Investors (FPIs) may pull back from emerging markets like India, affecting capital inflows and putting pressure on the rupee. Stock markets could become volatile, while gold prices may rise as investors seek safer assets during uncertain times.
What key indicators or tools do you personally use to understand the overall health of the economy and investor sentiment?
We track a range of macroeconomic indicators, including GDP, GVA, Gross Fixed Capital Formation (GFCF), CPI, WPI, G-Sec yields, capex trends, public debt levels, fiscal deficit, repo and reverse repo rates, monsoon forecasts, export-import data, and FDI/FII flows. Together, these give a broad view of the economy’s direction and market sentiment.
As Indian economy faces global challenges such as geopolitical tensions, rising commodity prices, and shifting capital flows, questions around economic strength and sectoral opportunities are more relevant than ever. In an exclusive interaction with Business Today, Shubham Jain, Group CEO of Infomerics Valuation and Ratings, offers data-backed insights on the country’s growth outlook, investment sentiment, fiscal strategy, and the sectors likely to gain from long-term structural changes.
How do you see India’s economic growth over the next 12 to 18 months, given the global challenges?
India's economy is expected to grow at a rate of 6.3% to 6.8% in the next 12 to 18 months. This growth will be driven mainly by strong domestic consumption and government-led infrastructure spending. Favourable early kharif sowing data and a good monsoon outlook support the agricultural sector, though climate risks remain. According to NSO estimates, GDP growth for Q4 FY25 stood at 7.4%, and for the full year at 6.5%. However, global uncertainties—such as geopolitical tensions, trade disruptions, and weather risks—could pose downside risks.
What are the key factors slowing down private sector capital investment?
Private Capex still faces hurdles such as weak demand, delays in project execution, and global trade uncertainties. In Q4 FY25, many listed firms reported slower earnings growth, with manufacturing and financial services seeing pressure on margins. Industrial growth (IIP) slowed to 1.2% in May 2025, with mining and electricity showing negative growth. Consumer demand—especially for non-durables—remains subdued, contributing to cautious investment sentiment.
Do you expect private sector investment (capex) in India to pick up meaningfully going forward?
Yes, private capex has been rising steadily. According to a government survey, aggregate capex increased by 66.3% between FY22 and FY25, led by manufacturing, which accounted for 43.8% of the total in FY25. RBI data also shows improving capacity utilization, and capital goods output has picked up. While firms remain cautious due to global uncertainties and interest rates, around 30% plan to invest in upgrades, indicating continued momentum into FY26.
How do you view the government’s spending and infrastructure push, especially in terms of balancing economic growth with fiscal discipline?
The government continues to push infrastructure investment while maintaining fiscal discipline. The FY26 Budget allocated Rs 11.21 lakh crore to infrastructure, slightly up from the previous year. The fiscal deficit is targeted to reduce to 4.4% of GDP in FY26, helped by the RBI’s record Rs 2.69 lakh crore dividend and higher non-tax revenue. GST collections also hit a record Rs 22.08 lakh crore in FY25, reflecting strong compliance and a growing taxpayer base. These trends indicate that the government is managing growth and fiscal consolidation in a balanced way.
Which sectors or investment themes do you think will benefit from the ongoing long-term changes in India’s economy?
Sectors like infrastructure, renewable energy, healthcare, defence, and fintech are likely to benefit from long-term shifts in India’s economy. These are being supported by government initiatives, increased urbanization, rising digitization, and changing geopolitical priorities.
After the recent volatility in energy prices, if crude oil prices rise further, which sectors in India are likely to be affected the most?
Higher crude oil prices will impact sectors such as paints, aviation, fertilisers, automobiles, petrochemicals, and tyres. The paint industry, for example, relies heavily on Titanium Dioxide, a crude derivative, which can form up to 50% of its input costs. Tyres, plastics, and inks also depend on crude-based carbon black.
Rising aviation fuel prices will affect airline margins, while packaging costs in FMCG and input costs in cement and steel may also rise. Although upstream oil companies could gain, oil marketing firms may face margin pressure if price hikes cannot be passed on. EVs may benefit relative to internal combustion vehicles, and fertilizer costs may increase due to expensive LNG.
How could the global slowdown and geopolitical issues like tensions in the Middle East and the Russia-Ukraine conflict, affect India’s economy and capital flows?
Global tensions can disrupt supply chains and raise raw material prices, leading to inflationary pressures. Foreign Portfolio Investors (FPIs) may pull back from emerging markets like India, affecting capital inflows and putting pressure on the rupee. Stock markets could become volatile, while gold prices may rise as investors seek safer assets during uncertain times.
What key indicators or tools do you personally use to understand the overall health of the economy and investor sentiment?
We track a range of macroeconomic indicators, including GDP, GVA, Gross Fixed Capital Formation (GFCF), CPI, WPI, G-Sec yields, capex trends, public debt levels, fiscal deficit, repo and reverse repo rates, monsoon forecasts, export-import data, and FDI/FII flows. Together, these give a broad view of the economy’s direction and market sentiment.