Market Radar India: Navigating Strong Growth Amidst Global Geopolitical Shocks

The Macro View

India remains the world's fastest-growing major economy, having expanded by 7.8% in the October-December quarter under a newly revamped data series.

The government estimates a 7.6% growth rate for the 2025-26 financial year, and despite pressures from global tariffs, private consumption has remained a remarkably strong driver, expanding by 8.7% year-on-year during the third quarter.

On the international trade front, diplomatic and economic ties with Canada are seeing a major reset following Canadian Prime Minister Mark Carney's visit to New Delhi, where the two nations announced their aim to conclude a free trade pact by the end of the year. 

Simultaneously, they agreed on a USD 1.9 billion uranium deal to support India's nuclear ambitions and the development of clean, reliable base load power.

Geopolitical Shockwaves

The escalating conflict involving the US, Israel, and Iran is creating significant headwinds for the Indian market, particularly concerning energy security. 

With roughly half of India's crude oil imports transiting through the Strait of Hormuz, the waterway's reported closure by Iran's military has sparked major supply concerns, causing Brent crude to jump more than 13% following the weekend's events.

This energy disruption extends to natural gas; Indian companies including GAIL and IOC have cut gas supplies to industries by 10% to 30% after QatarEnergy was forced to halt its liquefied natural gas (LNG) production due to a drone attack.

Furthermore, airspace closures over the Middle East have forced carriers like Air India and IndiGo to cancel or reroute hundreds of westbound flights, which significantly increases transit times and operational costs.

Against this volatile backdrop, Prime Minister Narendra Modi's historic visit to Israel - his first since the war in Gaza and shortly before the start of the new conflict - highlights the country's delicate diplomatic balancing act in a region critical to its connectivity and energy security.

Real Estate & Tech

Despite global volatility, India's commercial real estate and technology sectors continue to demonstrate robust, structural expansion.

Gross office leasing across India's top eight markets is projected to rise 12% to 14% year-on-year, potentially reaching 85 to 90 million square feet in FY27. This surge is heavily anchored by Global Capability Centres (GCCs) and flexible workspaces, which are increasingly viewed as structural components rather than cyclical add-ons.

Underscoring this institutional demand, the NCW Prime Offices Fund recently acquired a 51% stake in a 1.1 million square foot grade A+ commercial asset in Pune, targeting the city's established talent ecosystem and its position as a prominent tech hub.

Japanese technology firm NTT Data announced plans to increase its Indian workforce by 5,000 employees this year, covering software programming, consulting, and IT support. The company is also investing USD 1.5 billion to build four new data centres across the country, aiming to capitalise on a lucrative market where India currently hosts 20% of the world's data but possesses less than 6% of global data centre capacity.

Driven by sustained institutional investment and policy initiatives like the PM Gati Shakti, India's Grade A warehousing stock is projected to cross 500 million square feet by 2030, with the potential to scale up to 2 billion square feet by 2047.

This accelerated transformation is deeply intertwined with the nation's push to elevate its manufacturing sector's GDP contribution from 17% to 25% by 2035.

Look out for a new edition of the GRI Institute's Market Radar India next week!