India's economy is likely to remain one of the fastest-growing major economies, with exports emerging as a key growth driver even as higher oil prices and global bond yields pose fresh risks, HSBC Chief India Economist Pranjul Bhandari said on Wednesday.
**Growth moderating, still among fastest**
Bhandari expects growth to moderate from the 7.8% pace of the first quarter but remain in the 7-7.5% range over the next few quarters. She said growth has surprised on the upside despite weak monsoons and elevated crude prices, supported by government capital expenditure, formal-sector consumption and a sharp rise in exports.
Real exports have risen 12% year on year while nominal exports have increased 25%, she noted, marking a shift for an economy that has traditionally relied more on domestic demand.
**Trade deals to power the next leg**
The next phase of export growth is expected to come from recently signed trade agreements. The India-UK free trade agreement, in action for the past one-and-a-half to two months, has seen India's exports to the UK rise 12% month on month. Bhandari is hopeful an India-EU agreement — which she believes could give Indian exporters a 35-40% price advantage after tariff cuts — could materialise by the middle of 2027.
**Rate hikes ahead**
On monetary policy, Bhandari expects consumer inflation to stay above 6% through October, November and December, prompting the RBI to raise rates by 25 basis points each in October and December. "My sense is for about three months or so, inflation will be higher than 6%," she said, while adding that strong growth should keep the economy out of the danger zone.
**Sources:** India's Economy to Remain Fastest-Growing, Exports Key Driver: HSBC's Pranjul Bhandari (CNBC TV18): https://www.cnbctv18.com/economy/hs...a-crude-oil-prices-alpha-article-20001703.htm
**Growth moderating, still among fastest**
Bhandari expects growth to moderate from the 7.8% pace of the first quarter but remain in the 7-7.5% range over the next few quarters. She said growth has surprised on the upside despite weak monsoons and elevated crude prices, supported by government capital expenditure, formal-sector consumption and a sharp rise in exports.
Real exports have risen 12% year on year while nominal exports have increased 25%, she noted, marking a shift for an economy that has traditionally relied more on domestic demand.
**Trade deals to power the next leg**
The next phase of export growth is expected to come from recently signed trade agreements. The India-UK free trade agreement, in action for the past one-and-a-half to two months, has seen India's exports to the UK rise 12% month on month. Bhandari is hopeful an India-EU agreement — which she believes could give Indian exporters a 35-40% price advantage after tariff cuts — could materialise by the middle of 2027.
**Rate hikes ahead**
On monetary policy, Bhandari expects consumer inflation to stay above 6% through October, November and December, prompting the RBI to raise rates by 25 basis points each in October and December. "My sense is for about three months or so, inflation will be higher than 6%," she said, while adding that strong growth should keep the economy out of the danger zone.
**Sources:** India's Economy to Remain Fastest-Growing, Exports Key Driver: HSBC's Pranjul Bhandari (CNBC TV18): https://www.cnbctv18.com/economy/hs...a-crude-oil-prices-alpha-article-20001703.htm
