Why India Stocks Are Falling Despite Strong GDP Growth

Episode 79 of The Global Economy Podcast examines a puzzle: India's economy is growing at over 6 percent annually, yet the MSCI India ETF (INDA) has fallen nearly 1 percent in the past week and is down year-to-date. Lucas and Luna dig into the disconnect, focusing on two specific factors: rising core inflation in India, which hit 4.8 percent in May, and the widening current account deficit, which reached $28 billion in Q1 2026. They discuss how foreign portfolio investors have pulled $4.5 billion from Indian equities since April, and why the Reserve Bank of India's cautious stance on rate cuts is weighing on market sentiment. The hosts also touch on the broader EM sell-off triggered by the strong dollar, but argue that India's domestic-demand-driven economy should be more resilient—so why isn't it? The answer lies in valuations, inflation expectations, and a classic 'good news is bad news' dynamic where strong GDP reduces the chance of monetary easing. A concrete, data-driven look at why a booming economy doesn't always mean a booming stock market. #India #INDA #EmergingMarkets #GDPGrowth #Inflation #CurrentAccountDeficit #FPI #RBI #StrongDollar #EMselloff #Valuations #MonetaryPolicy #RateCuts #June2026 #Economics #GlobalEconomy #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo