Markets Are Buoyant As Indices Hit Two Month Highs
The markets have absorbed the impact of the tariffs, for sentimental or fundamental reasons
On Episode 679 of The Core Report, financial journalist Govindraj Ethiraj talks to Priyanka Kishore, Director and Principal Economist at Asia Decoded as well as Ashwin Mehta, Head of Research at Ambit Institutional Equities.
SHOW NOTES
(00:00) The Take
(03:53) Markets are buoyant as indices hit two month highs, should we thank trade optimism.
(08:46) Analysing the once hot IT sector, what lies within and what lies ahead?
(24:08) Indonesia is seeing street protests, the finance minister has resigned, what’s going on and what can we take away?
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Wednesday, the 17th of September, and this is Govindraj Ethiraj, broadcasting and streaming weekdays from Mumbai, India's financial capital,
The Take
India's era of quarterly results began in 2000, when the Securities and Exchange Board of India mandated that all listed companies declare their earnings every three months. Until then, it was annually.
However, the practice truly evolved into a spectacle a year later, thanks to IT giant Infosys. In a move that would set new standards of sorts, Infosys transformed its results announcements into high production events. From a specially designed studio in its Bangalore campus, the company pandered to live business television news with a press release meticulously detailing the time for audiences in both India and New York, and the list of speakers led by its then-chairman and CEO N.R. Narayanamurthy.
Infosys masterfully seized the twin opportunity of disclosing its numbers and doing so with unmatched panache. Over the years, this production only grew in size and scale as other IT firms jumped on the bandwagon, but none could match, or perhaps didn't try to match, Infosys' chutzpah. The quarterly drama, often accompanied by voluntary and highly influential earnings guidance, became a unique hallmark of the tech sector, serving also as a public statement of confidence.
But the whole system of frequent results reporting is now being questioned, and after a while. And the new debate was reignited or ignited when President Donald Trump suggested the day before that public companies should report only semi-annually. An idea which incidentally has simmered quietly within corporate boardrooms for several decades.
Now, the drawbacks of six-month reporting are obvious. Investors would be left in the dark for half the year, forcing share prices to react more to intuition and public data than to hard numbers. This lack of transparency could, of course, cut both ways, potentially hiding both bad and good news.
However, when you see it from a corporate perspective, the current system was seen by some, maybe even many, as onerous. CEOs have complained about the immense time, effort, and cost dedicated to compressing a quarter's performance into a report within weeks of its close. One IT CEO told me a few years ago that we are barely 40 days into a quarter and we're already working on the results for the end of it.
While modern technology and better systems have streamlined the consolidation process, the pressure to perform and face investors every 90 days does create stress and encourages a short-term mindset. And that short-termism is perhaps the strongest argument for change of some kind. Companies who want to make long-term bets, particularly involving research and development, need more breathing room.
And the relentless quarterly cycle acts as a disincentive, often pushing CEOs towards decisions that boost short-term returns at the expense of sustainable growth, a problem that's made worse by increasingly shorter CEO tenures, particularly in the West. But a middle ground may exist since the genie is mostly now out of the bottle. One solution could involve reduced quarterly disclosures, a ban on guidance, and a reinforced regulatory focus on the immediate reporting of material developments, something that happens in any case now.
But ultimately, this debate does offer a valuable moment or an opportunity for introspection. After nearly 25 years of mandated transparency, it's time to examine what the quarterly earnings saga has truly achieved, and more importantly, what it has not. This is one Trump brainwave that deserves serious consideration, perhaps more than most.
And our top stories and themes for today.
Markets are buoyant as indices hit two-month highs. Should we thank trade optimism?
Analysing the once-hot IT services sector, what lies within and what lies ahead?
And Indonesia is seeing street protests. The finance minister has resigned. What's going on and what can we take away?
It's Two-Month Highs
You have to give it to the market's sense or common sense in these matters.
So on 21st August, the Sensex was at 82,000. It started sliding in the run-up to 27th August, the day the U.S. government slapped an additional 25% tariff on Indian exports, which took the total to 50%, and the Sensex was down to 79,809 on August 29th. That's two days later.
Now, the markets and trade were hoping for a last-minute reprieve on the tariff front, which obviously did not come. On Tuesday, that's yesterday, the Sensex was back at 82,380, a two-month high, close to 21 August levels, but having recovered in any case in the last few days. So at one level, the markets have absorbed the impact of tariffs for sentimental or fundamental reasons.
On the other hand, they're now going up because of the perception that there might be a favourable outcome from trade negotiations that started afresh yesterday in New Delhi with visiting United States trade representative officials. So does that sound logical or just bullish? On the other hand, investors are also feeling charged up because the Federal Reserve is set to cut rates on Thursday after it started its two-day meet post the close of trading in India. Stocks were flat on Wall Street ahead of that Federal Reserve two-day meeting overnight, but were all near their record highs anyway.
So lower interest rates could mean more flows into emerging markets like India, though the overall trend line of flows right now is in the opposite direction, and more on that shortly. So markets, like we said, are at a two-month high and have closed higher on Tuesday as investors awaited the United States Federal Reserve monetary policy meeting outcome. At close, the Sensex was up 594 points to 82,380, and the NSE Nifty 50 was up 169 points to 25,239.
The broader markets were up to the Nifty mid-cap and small-cap were up 0.5 and 0.9% higher. Auto stocks are still doing well, and the Nifty auto index was the top gainer at 1.44%. Remember, auto stocks are doing well because of the perception that there will be a big sales bump following the rate cuts. So GST-led expectations of higher sales because of lower prices is obviously driving up those stock prices, but as we argued in the take the day before, it's not clear at this point what the final numbers will be like.
While consumers are welcoming lower prices, it's doubtful whether the low prices will spur additional demand beyond what consumers may have already chalked out. What that means is if you were looking to buy a car or you may have bought a car in the month of October, it's not like you'll buy two. And what lower prices have done at this point is to cause customers to hold back on car and other high-value purchases till September 23rd, the date the new prices kick in.
So we'll have to see and wait till the end of September data to get a sense and maybe end of October to understand how the festival season this year has fared from a consumption point of view. It should be good, but how good is something that we have to see. Meanwhile, Elara Securities' Global Liquidity Tracker says that India-focused funds have seen a roughly $1.9 billion outflow in the last seven weeks, marking the second sharp wave of withdrawals in less than a year.
And the latest exodus comes after a bigger phase between October 24 and March 25, when something like $4.4 billion exited Indian markets. So what the Elara report points out is the nervousness of global investors towards Indian equities at a time when other emerging markets are seeing strong inflows. The report says its most striking in Japan, once India's most reliable foreign backer.
Japanese funds had brought in about $9 billion between January 2023 and September 2024, but have since turned sellers. And while money is leaving India, other emerging markets are seeing powerful inflows. Emerging market commodity funds, for example, attracted over a billion dollars this week, following another billion dollars plus the previous week.
And the best such momentum since 2020. On the currency markets, the rupee closed stronger on Tuesday, hitting a one-week peak as expectations of a rate cut by the Federal Reserve kept the dollar weak against most currencies. It closed at Rs.88.05 per dollar, up about 0.18% after touching Rs.88.02, the strongest since September 9, according to Reuters.
Most Asian currencies were also strong while the dollar slipped to more than a two-month low against the sterling and the euro. And gold, which continues to rise, went past $3,700 an ounce levels for the first time on Tuesday, thanks to those continuing bets of a rate cut by the Federal Reserve this week, which in turn has fuelled a rally that's been stoked by safe-haven demand, central bank buying, and a weaker dollar, according to Reuters. So specifically, spot gold hit about $3,702 on Tuesday before slipping back.
Betting On IT Companies
We spoke of IT services companies earlier in their penchant for flashy quarterly results presentations, at least once upon a time. Now, first quarter results for the tech companies are well and truly in. The broad takeaways are quite clear, which is that IT companies, at least the larger ones, are still growing slowly.
Tariff issues have muddied the waters even more, given that companies are holding back on major investments, particularly in the United States, which is a major market for Indian IT services companies. Now, the situation is not dissimilar in Europe and other markets Indian IT serves. There is, of course, the domestic market, but it is smaller.
So what are the takeaways from the latest results and what are they telling us about the medium to long-term outlook for IT companies as seen from both within and outside? I caught up with Ashwin Mehta, Managing Director and Head of Research at Mumbai-based Ambit, and I began by asking him what his takeaways were from the Q1 results and then going on to the strategic outlook.
INTERVIEW TRANSCRIPT
Ashwin Mehta: In terms of results in Tokyo, if you were to look at it, there were growth disappointments. So, 6 out of 9 companies that we cover would have missed expectations in terms of growth in the last quarter. The other thing, and which was a slightly positive thing, was in terms of deal flows, wherein deal flows did improve across companies, but that has to be looked at in the context that deal durations have gone up and leakages in the existing business has gone up.
So, the translation need not happen in line with what the deal flows were. If you look at, say, on an LTM or a last 12 month basis, most of the larger companies are flat to down in terms of deal flows. So, except for a few companies which are doing better, say people like Oforge or TechMythra, or Persistent for that matter, most other companies are flat to down in terms of deal flows.
So, that doesn't give you perspective on whether the growth will materially improve or not here. The third thing which was seen was that banking and financial services, which is, say, 30% of revenues of IT companies, was a drag. So, this was one area where most companies were positive about, but actually you saw declines in banking and financial services on a quarter-on-quarter basis.
And if you look at it even on a last 12 month perspective, while banking grew, all the tariff-affected sectors were down. So, banking was largely countered by tariff-affected sectors declining. The other trend that you saw was in terms of margins, wherein 7 out of 9 companies that we cover were at or below consensus in terms of margins.
So, you're starting to see the cost of growth in terms of margins. And one of the things that typically people buy IT for is cash flows. And that's where we've started to see a use of the balance sheet in terms of growth, wherein, say, 7 out of the 9 companies or 7 out of the 10 companies that we cover have seen cash conversions being weak over the last 3 years compared to the prior 3 years.
So, those were some of the trends that you saw in terms of numbers. And just to put it in perspective, the top 4 IT companies grew at, say, 0.5% on a YOY basis last quarter. So, we've progressively slowed down in terms of growth in the Tier 1 companies.
Tier 2 did better in terms of growth, led by people like Oforge and Persistent.
Govindraj Ethiraj: Right. So, now, I know the markets want higher growth. But if you were to look at the industry in isolation and in the context of what's going on in the largest market, which is the United States, would it be correct to say that this growth is actually good and it could have been much worse?
Ashwin Mehta: So, I think for some of them, the US still is growing at near zero for the top 4 IT companies. So, the US continues to be sluggish. In the past, you have seen single-segment-led growth across companies.
So, say, TCS, for example, has grown driven by BSNL. Their developed market growth has been sluggish for a while. In some companies, it is fast-throughs that are driving growth.
In some of the smaller companies, say, segments like healthcare have driven growth. So, it's not a broad-based growth that you are seeing and which is where the conviction on saying that things will improve from here isn't there. Because you're not seeing, one, deal flows improve.
Second, you're not seeing broad-basing growth. Third, the macro wasn't bad over the last few years. Macro is expected to turn weaker as you go forward.
And then, uncertainty is not great from IT services perspective. Because people hold back in terms of decisions when there is uncertainty. And that's something that could reflect in future quarters in terms of the market.
Govindraj Ethiraj: Right. So, what you're saying is that there are some trends which are more secular in nature. And that is what is really driving down, let's say, new business growth or new business accretion, particularly to Indian IT companies.
So, what are those key big trends that you're seeing which are affecting? I mean, I'm assuming AI is somewhere on that map. But what else?
Ashwin Mehta: So, I think one of the trends is obviously Gen AI. And our view is that it will play out similar to how digital plays down. The expectation when digital happened was that Indian IT will see digital growing faster.
That will lead to the share of digital becoming bigger. And that leads to the growth of the sector improving. That never played out because there was a large legacy to worry about.
A similar kind of scenario will play out in a Gen AI trend as well. Wherein, what will essentially happen is that you have a large legacy. And this is a transition that's possibly affecting Indian IT more.
Because historical tech transitions were in areas where we were not necessarily present. So, when cloud happened, data centre services weren't our bread and butter. Or when SaaS happened, we were largely doing on-prem support.
This is the first time that you are seeing applications getting affected. And that will have an impact on your legacy side of the business. Not to say that there won't be incremental demand coming out of Gen AI.
But that might be an impact in our view. So, one is the tech transition that is at play. The second is the fact that you are starting to see MNCs like Accenture grow faster than Indian IT companies.
You're starting to see tier 2 IT companies growing faster than tier 1. And you're also seeing GCCs grow faster. Now, that effectively means that it's not been easy for Indian IT companies, both from an insourced competition as well as outsourced competition.
The third is the macro element. And our view has been that macro is always an earlier indicator in terms of demand. And that does not seem to suggest a material recovery.
Because client revenues, which is indicated by S&P 500, are only showing a moderate recovery. You are in a benign GDP growth scenario, wherein the US was in the 2-2.5% growth range for the last 3 years. It's expected to go down by around a percentage point as you go forward.
That's the same scenario for Europe. So when GDP growths are slowing, the chances of a discretionary pickup are that much lower. So that's the second driver of slower demand.
And the third is that this is the third year of slowdown for the sector, wherein a lot of levers have already been utilised. So that reflects in terms of margins of these companies, wherein our view is different from consensus, wherein we think margins will not necessarily go up for tier 1 IT companies. And might not go up as much for tier 2 IT companies, as well as what most people believe.
So I think in terms of trends, you have tech shifts. You have insourced and outsourced competition. You have possibly a weaker macro.
Add on top of that, the macro or the policy uncertainty that's kind of come through, which is not great whether something happens or not. And then you are already leveraged in terms of margins.
Govindraj Ethiraj: Right. So a question which maybe I can split into two parts. So first is between the smaller tier 2 companies who are doing well, is it a numerator denominator issue?
And that's why they're doing well? Or is it because they're doing something different or they're performing or delivering different kinds of services and therefore they're growing faster? Second is the big companies.
They obviously know this and they've been feeling and experiencing this for some years now, as you said. What are they doing to get out of this? Or what's your sense of what they're doing to get out of this?
Ashwin Mehta: So I think there are reasons for why tier 2 IT companies are growing faster than tier 1 IT companies. And this has been a trend that you have seen from say FY 16, 17 onwards. Now, one of the factors is that whenever there is a tech transition that happens, the person who has a lower legacy will typically get less affected by that.
And which is one of the factors playing to the advantage. That you have to pivot, you get to pivot faster in some of these tier 2 IT companies. The second is that they've all improved their management bandwidths by hiring people who have seen scale in their lives.
The third thing that's happened is that they've built competencies in areas like cloud, app modernisation, some cases data and SaaS as well. And that helps them in terms of starting to compete. And it's become not an empanelment-based business, but more of an open business wherein if somebody has the capabilities, he gets to be asked to come onto the table.
So those are some of the factors that have driven the faster growth for tier 2 IT companies. And in addition, the incentivisation has been somewhat better in some of these companies with higher ESOPs. The sales spends of some of these companies are in the range of 15 to 16% of sales, which is comparably higher than what the larger companies have done.
So there's a reason why this is happening. And this might continue in our view, even going forward in the Gen AI scenario as well. Though obviously everybody will see an interim pressure on their existing business because of the cannibalisation.
What are tier 1 IT companies doing to change that? I think one is their handicap, which is there in terms of having a larger legacy. You will over a period of time see more acquisition intensity in the sector.
That's what our view is. If you look at the period FY 13 to 18, the acquisition intensity in the sector went up. That might again recur.
Some signs of that are visible in terms of the recent acquisitions that have happened to pivot faster. The third is you will have to retrain your people, which they are doing. You will have to build propositions, and which is where almost everybody has built Sage and TKI foundries across multiple use cases.
They are offering, say, Gen AI-related or platform-led delivery to their clients. So that's something that you are doing. And then in a varying measure, to negate some of the pressures that are there in terms of your existing business, you are willing to some extent to stake your balance sheet, to drive growth.
So you are seeing captive setup deals. You are seeing deals where people take over as involved. You're also seeing deals where there's an upfront saving being granted to clients, and there's an upfront cost before revenue kicks in for some of these companies.
So some of that has also happened so that growth comes through in these times, but that's a constraint that some of the larger companies are having to live with. Their larger ships and larger ships typically take longer time to come.
Govindraj Ethiraj: All of this finally links to or boils down to valuations. How is that looking to you today? And valuations obviously have been beaten down, responding to exactly all of what you've been saying.
So are things more stable now, particularly for large IT, or do we still have a way to go?
Ashwin Mehta: I think if you look at larger IT companies, they're still building between 6% to 8% growth over a 10-year duration. In terms of the current valuations, the tier 2 IT companies are building in between 30% to 20% growth still in the current valuations. Now this is ahead of pre-COVID growths that they are still building.
So there is one reality which is the valuation inflation that is happening because there is liquidity in India. The other reality is that if you look at global IT services companies, you see them materially at a discount to the pre-COVID valuations. So people like Accenture are now 17-17.5 times one year forward, a range materially below where TCS Infosys trades at. Similar is the case with say a Cognisant, which trades at sub-13 times, even though it would possibly grow better than what a Wipro would grow. Their margins are comparable, their free cash flow yields are better. So it's more a question of options.
For foreign investors, there is a growing part of tech which is available. So you have cloud providers growing, you have software companies growing, you also have players like Nvidia growing, and people like Oracle building newer businesses, which is available for them. And in that context, IT services growth is materially lower.
There's the other context which we face in India, where you're compared with what happens in banks, what happens in FMCG. And in that scenario, there is a relative preference for IT that some investors would have. But in absolute terms, our view still is that valuations are, say, almost 13% premium to pre-COVID valuations for Tier 1, almost 85% premium to pre-COVID valuations for Tier 2, and not necessarily cheap.
Govindraj Ethiraj: I think maybe that's a good note to end on, sombre and realistic. Thank you so much for joining me, Ashwin.
News from Indonesia
Indonesia has been seeing several developments which are worth viewing and noting from here.
So the background is this. Indonesia's longstanding Finance Minister, Sri Mulyani Indrawati, was forced to leave office on 8th of September. Elsewhere, there's been unrest on the streets, driven also by middle-class angst.
The protests have highlighted the tension between the narrative of a stable economy anchored around 5% GDP growth and the reality of a shrinking Indonesian middle-class with limited employment prospects, which has been evident in the bottom-up data for a while. Priyanka Kishore, Director and Principal Economist of Singapore-based Asia Decoded, wrote in a piece a couple of days ago. On the other hand, she points out Chinese goods are flooding Indonesia, affecting domestic manufacturing and therefore jobs.
So the policy response in some ways is increased public expenditure. At the heart of the matter, writes Kishore, is the Indonesian president's penchant for debt-fuelled growth that has raised worries about Indonesia's commitment to fiscal discipline. Though Indonesia's president has rightly identified the country's narrow tax base of 10.4% of GDP as a constraint on public spending, he has nonetheless advocated for higher expenditure since his presidential campaign and suggested raising the debt-to-ratio to 50% of GDP, according to Kishore.
I reached out to Priyanka Kishore and I began by asking her what she was taking away from her vantage point in Singapore and how she would look at it from our vantage point, that is, in India as economists or as macro policy observers.
INTERVIEW TRANSCRIPT
Priyanka Kishore: The protests actually show the inherent tension between, you know, how the national accounts portray the country as sailing through around that 5% GDP steady growth, but actually on the run, people are struggling with a shrinking middle class, limited employment prospects, and low visibility on incomes. So it shows their angst. That's what the protests bring to the front.
And what is complicated is that the government, largely the president himself, is trying to solve these problems by just throwing money at them. So he wants to just spend more to grow, and he wants to spend on his priority programmes rather than addressing the top concerns of the people first. And this has also led to challenges with the finance minister, who is known for fiscal discipline, and ex-finance minister, who is known for fiscal discipline and following a very prudent fiscal policy over the years.
And so in short, he has taken this opportunity to consolidate power in the cabinet, replace her with a post-spending finance minister, and really now going forward, we could just see that he's going to spend more to maybe temporarily achieve higher growth. But we know from experience everywhere that the debt-led growth model that he is pushing for will not solve the structural issues at the heart of the problems that the protesters are struggling with. It will actually exacerbate some of these challenges.
Govindraj Ethiraj: Tell us about why the 5% growth which has been steady is not good in the context, and what would be or what would have been optimum for an economy of Indonesia's size?
Priyanka Kishore: So Indonesia, like the rest of us, wants to become a high-income economy. And at 5% growth rate, that target is far away. But it's a good growth rate in this world.
But beneath it, there is a lot of inequality as well. So as I said, the uneven recovery from COVID, which has actually exaggerated the situations that existed pre-COVID. And this is not really just to Indonesia.
We have seen this across the region. And so in that context, even truly maintaining that 5% growth rate with more equitable distribution and job prospects and income equality is a challenging task and is a good target to have. But on the other hand, the vision here for Prabowo, like his predecessors, is to lift growth to 8% to bring up Indonesia into the high-income status from the developing economy status it's currently in.
That's where the arc is as to where it is and what the political ambitions are and how they line up.
Govindraj Ethiraj: Right. And Indonesia also has a narrow tax-based challenge. How is the government addressing that?
And how could that change?
Priyanka Kishore: Very glad you asked that question. So it does have, it's 10.4% of GDP, one of the narrowest tax bases in the region, which is why they often have to resort to amnesty schemes to raise revenues because they are not able to raise taxes, tax corrections with ordinary routes. And this also poses the problem of fiscal deficit blowing up, because if you cannot raise your tax base and your tax revenues, at the same time, you have diverted some of the non-tax revenues, which come from the SOE dividends, which used to go to the Ministry of Finance, but will now go to the new sovereign wealth fund, Dhananthara.
So that has deprived the budget of one important source of revenue. So you have the revenue side, which is challenged. The tax projections and the revenue projections are increasingly looking optimistic.
So they're likely to undershoot, as they have done this year, and they'll probably do next year. But on the other hand, you are pushing up expenditure. Now, there was an efficiency drive at the start of the year, where they showed that they have cut budgets from several ministries, 48 to be exact, in terms of their operational costs and transfers to the local governments to make space for reallocating budgets to these new initiators, and also security and defence, which is very high on Prabhupada's agenda.
But even despite that, what is happening is that in 2025, the overall ministerial budget is going to be 10% higher than originally planned. So expenditure is not getting pulled back to the extent that revenue is undershooting in the absence of tax reforms. And if they actually do not prioritise tax reforms, they pose the risk of the deficit blowing out.
And by blowing out, I mean, breaching the 3% official ceiling cap, which has been in place since the Asian financial crisis by a state law.
Govindraj Ethiraj: Right. And for economists who are looking at the region and or Indonesia in specific from India, or if you were to now view this through an India lens, what do you think are the parallels or takeaways?
Priyanka Kishore: You know, just looking at one of the root causes, job creation, we know that has been a challenge for India as well. But then just taking that and comparing the two, it's not the same situation. Some of these are symptoms.
The drivers are different. But I think what would be the large takeaways is that A, I think data has to be better across the region. In India, like Indonesia, there are challenges in terms of, you know, how our labour data, the narrative it tells us, our expenditure data, the narrative it tells us.
Because if data is not telling us the actual on the ground narrative, then when policy is being formed, policy is being executed, the policymakers are at risk of being blindsided as to what they are going for, which is what has happened in Indonesia. And that is a challenge, I think, in India as well. And what that extends into the other part is that when you are implementing these policies, given that you're dealing with people at different stages of recovery from the pandemic, people and businesses, you have to increasingly take into account how these policies are going to impact them.
So the consequences of policies should not be looked at only at an aggregate level, they need to be now looked at a more nuanced level across income structures. That is very important. And then, you know, you can go on to resolve these issues, addressing these issues of joblessness and weak income prospects.
So while they look similar, the reasons these problems are having are different for the two countries.
Govindraj Ethiraj: Right. Last question. So when you say dealing with specific causes or issues, can you illustrate that?
Or policy response to specific causes and issues?
Priyanka Kishore: For example, I would say in Indonesia, part of the joblessness is due to the exposure to the Chinese investments and imports that are coming into the country. They have led to the shutdown of local firms. We're clearly seeing in the data that there's been a spike in layoffs over the last two to three years.
That has coincided with the industries in which there have been greater inflow of weak Chinese imports or investments coming in that have not led to, you know, even with investments coming in, the jobs that have been replaced have not been fully created back. So there is a different driver of the problem, perhaps. And in India, we know joblessness is due to lack of investments.
We are not seeing our own private investment pickup. The FDI story has disappointed us so far. And so without additional investment, we are struggling to create those additional jobs.
We are not really as open as Indonesia is. Indonesia is also not a very open economy. We are not as open as them to Chinese investments and imports either.
But on the whole, I don't think the takeaway looking at Indonesia should be that India should decouple from China. No, you have to calibrate it. You have to study them.
And then you have to come up with your own response as to, you know, you need investments. To what extent should you let Chinese investments come in to create those jobs? And which industries should they come in so that they actually do not, you know, decimate your existing industry?
So this kind of nuanced decision making is what needs to happen in the current environment.
Govindraj Ethiraj: Priyanka, it was a pleasure speaking with you. Thank you so much for joining me.
Priyanka Kishore: Thanks for having me back.
