What's going on?

Data out on Tuesday showed India�s economic growth slowed down last quarter.

What does this mean?

It seems two major culprits were to blame for India’s tepid growth. Suspect A: interest rate hikes, which dented demand and pushed consumer spending � which makes up over half of the economy � down to 2.1% growth, a sharp dropoff from 8.8% the quarter before. And Suspect B: the flagging manufacturing sector, which shrank for the second time in a row as profit margins took a hit and weakening global demand shook exports. The end result was that overall growth came in at 4.4% � slower than expected, and down from 6.3% the quarter before. That hasn�t got the Indian government worried, mind you: it thinks a 7% uptick is in the cards for the fiscal year ending in April, despite upcoming hikes and the unsteady global economy.

Why should I care?

The bigger picture: India in the driver�s seat.
That said, India might be right to bet on itself: by some estimates, the country�s more populous than China, with a younger median age to boot � meaning there�s plenty of firepower to fuel growth. And it helps that businesses like Apple are increasingly diversifying into India too, given China�s lengthy Covid disruptions and ongoing tensions with the US. That could be why Morgan Stanley sees the nation becoming the world�s third-biggest economy by 2027.

For markets: Promise aplenty.
Investors and funds alike have been salivating over India, and the country’s stock market performance has made the US�s seem pretty inadequate over the past year. And with all this talk of the country’s shining future � plus forecasts of 11% annual growth � Indian stocks might just be a savvy buy for your portfolio too.