Downside risk in short term but India likely to benefit from China outflows: AMP Capital

“So that may benefit India on a longer-term basis and the other aspect is if these tensions with China continue to escalate over time, US companies cut back their exposure to China, India will benefit from that to some degree as will other Asian countries away from China,” he said.

There are grounds for optimism regarding India on a longer-term basis. “My view has been that China is on its way to becoming the world's biggest economy, but a decade or two after that, India will be the world's biggest economy. We're still talking about many decades away, but I think that is the direction we're heading in. And of course, India's relatively stable democracy is a big factor in that regard,” he mentioned.