Mark Mobius expects smooth FII inflows despite cautious optimism on global, Indian economic trends

Foreign fund inflows into Indian financial markets are expected to remain robust, supported by the nation’s adept management of inflation without hindering economic growth, stated Mark Mobius, Chairman of the Mobius Emerging Opportunities Fund, during an investor webinar organized by PL Capital Group – Prabhudas Lilladher.

Mobius highlighted that India continues to be a focal point for global investors while sharing insights into global market trends, emerging challenges, and the sectors driving India’s growth.

Indian Economy: Steady Growth Amid Global Challenges

Mobius lauded India’s economic resilience, noting that a GDP growth rate of 6-7% is commendable given the $4 trillion size of the economy and the global average. Despite Q2 FY25 growth of 5.4%, which fell below expectations, he attributed this performance to structural strengths such as local manufacturing and domestic consumption bolstered by the “Make in India” initiative.

“On a macro front, 6-7% growth rate in India is a good rate given the global average. Make in India and the impetus the government provides to manufacture locally, is a big positive and the biggest advantage of local manufacturing in India is that they have a big market for local/self- consumption,” Mobius said during his chat with Amisha Vora, CMD, PL Capital.

FII Flows

According to Mobius, India is well-positioned to benefit from continued foreign fund inflows into emerging markets as global wealth expands, especially in the US.

“Emerging Markets like India stand to benefit as there is a limit to which investors would want to put their money in the US market. Plus, the opportunities in emerging markets are also thriving,” he said.

Despite potential US-China trade agreements that may increase flows into China, Mobius affirmed India’s leading position in terms of growth prospects.

“India’s ability to manage inflation without compromising growth will be pivotal in attracting sustained foreign investments,” he said in the PL Capital webinar.

Sectors in Focus

Mobius spotlighted sectors poised to propel India’s economic ascent:

Defense Manufacturing: India’s self-reliance initiatives and strategic technology partnerships are fostering a globally relevant ecosystem.

Semiconductors: The country’s foray into semiconductor manufacturing, leveraging its software expertise, marks a transformative shift.

Infrastructure: Expanding transport networks, ports, and urbanization underpin India’s growth strategy, while digital public infrastructure initiatives like UPI and Aadhaar enhance efficiency and inclusivity.

Additionally, he underscored the role of energy and commodities, tourism, and digital innovations in shaping India’s economic landscape.

Outlook for 2025

Mobius articulated a cautiously optimistic outlook for global and Indian economic trends, driven by both cyclical and structural factors. Tapering off Russia-Ukraine conflict and reduced Middle East turmoil, are expected to bolster global growth.

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