India Macro Strategy A summer of hope

Research evidence excerpt

India Macro Strategy A summer of hope

7 July 2026

India Macro Strategy Multi-AssetIndia

A summer of hope

◆ Falling oil prices and India’s supportive FX package have INDIA TRADE IDEAS

improved the market outlook from risk-off towards gentle risk-on Rates Buy IGB 15y

FX Sell USD-INR

◆ Compared to 2013, FX and equities seem undervalued per our Source: HSBC

multi-asset model, and rates are benefiting from structural

Pranjul Bhandari

improvements Chief India Economist/Strategist, ASEAN Economist

The Hongkong and Shanghai Banking Corporation

Limited, Singapore Branch

◆ We remain broadly constructive across asset classes, though pranjul.bhandari@hsbc.com.sg

much will depend on actual inflows and RBI’s liquidity/FX action +65 6658 4976

Dr. Murat Ulgen

Global Head of Macro Strategy

India’s macro backdrop has improved. Two of our three earlier concerns – high oil prices HSBC Bank plc

muratulgen@hsbc.com

and tight domestic financial conditions – have eased as oil has fallen and the June FX +44 20 7991 6782

package (deposit incentives for overseas Indians, cheaper FX swaps for PSUs/banks, tax Joey Chew

concessions for overseas bond investors, and a wider universe of investible bonds) has Head of Asia FX Research

loosened financial conditions. Yields declined across instruments, even before inflows Limited, Singapore Branch

driven by the package gathered pace. We recently raised our FY27 GDP forecast to 6.3% joey.s.chew@hsbc.com.sg

+65 6658 5186

from 6.0%. Markets have responded with a pivot from risk-off to gently risk‑on across

Song Jin Lee, CFA

asset classes, with India outperforming the EM benchmark in the past month. Foreign Global Head of Credit Strategy

investors have signalled growing confidence, with USD6.4bn of bond inflows since early HSBC Bank plc

songjin.lee@hsbc.com