India’s Macro Story Strongest in 30 Years, Says Dr Jim Walker at PL Capital Webinar
- 12th September 2025
- 01:00:00 PM
- 3 min read
Summary
India’s economy is entering its strongest phase in three decades, according to Dr Jim Walker, Chief Economist at Aletheia Capital. Speaking at a webinar hosted by PL Capital, Walker said GST reforms, stable currency fundamentals, resilient retail flows and stronger banks could set the stage for a multi-year investment cycle.
Mumbai | September 12 – Dr Jim Walker, best known for calling the Asian Financial Crisis and the 2007 US downturn, said India today looks stronger than at any time in his career.
“In 30 years of writing on India, I have never seen the macro environment look this good. The Reserve Bank of India and the Finance Ministry are in very good hands.”
While the US wrestles with inflation and volatile bond markets, Walker argued India stands out for its disciplined fiscal and monetary policy. Government finances are healthier, bank balance sheets are stronger, corporate leverage is low and inflation remains relatively stable.
“Valuations look demanding, but they are justified if earnings continue to grow. Retail investors through SIPs are the backbone of capital formation in India.”
Investor Takeaway
Despite his optimism, Walker cautioned that bureaucracy remains India’s biggest hurdle. Labour laws and compliance rules discourage firms from scaling beyond a few dozen employees.
“Thousands of firms stop at nine or nineteen employees to avoid regulation. If the limit is raised to 50 or 100, business activity will expand sharply.”
Even so, Walker’s core message was clear: India is positioned to lead in a turbulent global economy.
“This is the best policy regime I have seen in India. Investors should feel confident staying invested.”
The discussion was part of PL Capital’s ongoing investor education initiative, bringing global perspectives to Indian markets.
He also challenged the narrative of a weak rupee:
“Buy India, but don’t hedge. The rupee may not appreciate, but it’s not going to depreciate either.”
Walker explained that once foreign direct investment inflows are included, India’s external resource gap is minimal and sometimes even a surplus — a sharp contrast to perceptions of vulnerability.
GST Reform and Private Capex
Walker highlighted that India’s GST reforms could be the missing link for private investment. The simplification of rates to 5% and 18% lowers costs on agricultural machinery, consumer durables and staples, boosting household demand and giving companies confidence to invest.
“Lower rates will stimulate business, boost demand and eventually raise collections. The next investment cycle will be driven by private capex, not just government spending.”
He contrasted India with China, where corporate returns have been weak for two years. India, by comparison, cleaned up its banking sector during Covid and consolidated state-owned lenders, enabling credit growth at decade highs.
“India’s return on equity has improved and can strengthen further in the next three to five years.”
On markets, Walker said domestic retail flows provide resilience even as foreign institutional investors book profits.
PL Capital
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
