The realities of a post-crisis world suggest the time may be right for increased investment overseas — and we are hard-pressed to identify an emerging market with as much potential as India.
Before the economic crisis, popular opinion was that India could sustain a middle-class economy independent of the developed world. Surprisingly, however, during the Great Recession this decoupling theory was debunked. India experienced notable economic contraction due to the US-led slowdown. The country faced capital flow reversals, widening of spreads on sovereign and corporate debt and abrupt currency depreciation. The lesson? For now, emerging markets are still tied to the US.
The following article, written by PwC partner Kristian Knibutat, discusses several aspects of India’s economy and what makes it so attractive for the future of deals. It was originally published in the October 2010 issue of Lexpert magazine and is reprinted here with permission.