A Familiar Scene: India vs. England, On the Field and in the Markets
It’s July. As the Indian cricket team faces off against England in swinging English conditions, there’s an oddly familiar match unfolding far from the stadium - in global financial markets.
The world economy, like an old cricket pitch, is starting to show its cracks. Developed markets - the US, Europe, Japan - have walked in padded up, only to find the pitch isn’t what they expected. It’s unpredictable, turning, and testing even the best.
India, however, looks composed at the crease. The footwork is sound, the defense is tight, and it’s playing the long game.
When the Old Giants Slip… Again
If this story feels familiar, that’s because it is.
Think back to 2008. The world’s most sophisticated economies crumbled under their own financial engineering - subprime mortgages, reckless lending, and blind faith in endless growth.
Then again in 2020, the Covid pandemic exposed just how fragile global supply chains and over-leveraged economies were.
And here we are in 2025. Different cause. Same pattern. A combination of ballooning government debt, slowing growth, and inflation hangovers from the post-Covid stimulus spree has left developed economies gasping.
The US, despite its reputation as the world's economic powerhouse, is now weighed down by $37 trillion in debt - that’s 123% of GDP, the highest since World War II. Its growth engine? Sputtering. Q1 GDP fell -0.5%, the first contraction in over two years.
Germany and the UK, once models of fiscal prudence, now face bond yields that are the highest in over a decade.
Japan, long the poster child for managing high debt, now looks more like a warning than a role model, with debt at 250% of GDP.
The world’s richest economies, much like a batting lineup collapsing after a strong start, seem to be losing grip in the middle overs.
Commodities and Currencies: When the Ball Swings Unexpectedly
Crude oil shot past $82/barrel earlier this year after Middle East tensions flared - echoes of 2004, when a single supply shock sent oil soaring past $50 for the first time in history. But now it’s retreated to $67, as the ceasefire settled nerves.
Gold, as always, plays the role of Rahul Dravid - the dependable anchor. It’s surged over 40% YTD, reflecting the same pattern seen during the 2008 crisis, when gold became the ultimate safe haven.
The US dollar, once considered invincible, has slumped to its weakest since 2021. Emerging markets are suddenly the favorites.
Equity Markets – The Changing of the Guard
There was a time when Wall Street dictated the rhythm of global investing. But in 2025, the scoreboard tells a different story.
India - Calm at the Crease, Eyes on the Long Game
India’s resilience is not an accident. It’s the product of learning from its own economic overs and unders.
Remember the 2013 Taper Tantrum? When the US hinted at pulling back stimulus, emerging markets—including India - went into free fall. The rupee crashed, bond yields soared, and panic ruled.
Not this time.
India entered 2025 with record forex reserves of $698 billion - its strongest defense ever.
Unlike the post-Covid stimulus excesses of the West, India managed its fiscal levers cautiously, avoiding the sugar rush followed by crashes.
Monsoons are 9% above average, reviving rural demand - a reminder of 2019’s rural slowdown, which India struggled to navigate back then.
Inflation is under control (CPI at 3.2%), compared to the nightmares of 2022, when food prices were soaring globally.
The current account flipped to a $13.5 billion surplus, a remarkable turnaround from persistent deficits that plagued India for years.
This is not luck. This is discipline.
RBI – The Sensible Captain
Three rate cuts this year, totaling 100 bps, are not reckless - they’re pre-emptive.
A 100 bps CRR cut frees up liquidity, like moving an extra slip fielder to silly point when the pitch turns.
In past crises - be it 1991, 2008, or 2013 - the RBI was often reactive. This time, it’s proactive, reading the pitch perfectly.
Sector Analysis - Who’s in Form?
The Make-in-India story, ignored a decade ago, is now a megatrend - defence, semiconductors, electronics, and infrastructure are the growth engines.
Investor Game Plan - Reading the Field
Equity
Stay at the crease.
Lean into domestic themes - banks, manufacturing, autos, infrastructure.
Mid and small caps will shine as the rate cuts flow into the economy.
Fixed Income
Lock in AAA corporate bonds yielding 6.9-7.15% - a gift in a falling rate environment.
Tax-free PSU bonds remain your “safe singles” player.
Stay neutral on G-Secs for now - some capital appreciation still possible.
Global
Reduce exposure to the US - it’s in rebuilding mode.
Increase weights on Asia (ex-Japan), Europe, and emerging markets.
Keep gold - your dependable wicketkeeper in uncertain overs.
Final Over: India’s Time to Anchor the Innings
India’s economy in 2025 feels like watching a well-set batter on 55 not out. Not flashy. Not rushing. Just focused on the long game.
As the world fumbles with rising debt, yield shocks, and currency swings, India stands as a rare beacon of stability and growth.
Lesson from both cricket and markets:“Form is temporary, class is permanent - and discipline wins Test matches.”
Time to set your field. Ready to plan your innings?
Let’s chat about how you position your investments for the second half of 2025.