As the US Fed continues to raise rates and the US may slip into a recession, commodity prices may cool off further which will be a positive for India, said Saurabh Mukherjea, Founder, Marcellus Investment Managers in an interview with ET Now.
"From April, as the Fed continues hiking rates and shows greater determination to push America into at least a slowdown if not a recession, the odds are that commodities will cool off and by and large that is a good thing for India," said Mukherjea.
He, however, added that it is early to predict the course of commodity prices.
Mukherjea said that the Indian market received strong support from the liquidity gush by the global central banks and that era is over since central banks are now more focussed on taming inflation by hiking rates.
He said the main support India will get now will be from the shift of the West from China to India.
"I reckon the main ally for India over the next two, three, four years will be the gradual realisation by foreign investors that Xi Jinping is simply not going to make China that they thought they were investing in. So this whole notion that the West has cultivated over the last 20 years that China is some great country to invest in, has gradually crumbled," Mukherjea told ET Now.
"There is still a body of hope in the west that the good old China that they loved and invested six times more money than they invested in India, will come back. Through the winter, that hope will crumble and therefore if we look ahead, the main ally for India will be the reallocation of $3 trillion odd that western investors have pumped into China over the last 20 years," Mukherjea added.
Disclaimer: This article is based on an ET Now interview. The views and recommendations made above are those of the analyst and not of MintGenie.
