A tale of two currencies: the dollar and the rupee. From the Indian perspective, we expect some good times for the travel trade and international aviation, and reduction in duties on various luxury goods by way of the appreciating rupee. Lifestyle related consumption can only increase as larger number of luxury brands team up with real estate majors to foray into the market. I also expect international education majors to build a base here and take advantage of the expected drop in the cost of studying abroad.
India's domestic growth story will outshine the export story. In 2007, we saw a major change where the domestic growth story started becoming more prominent than the export-led growth story (export growth has been the dominant theme in India for a long time). 2008 will see export slowdown and investors will focus more on local growth plays such as infrastructure, real estate, financial services, telecom, media and entertainment, and retailing. The weakening dollar has already begun to impact exports and the outcome could also lead to large-scale repercussions on jobs or the lack of it.
The talent and space crunch will continue to persist. Any productive asset will continue to be scarce. The two most important being People and Space. We do not see people and real estate crunch easing off till middle of 2009.
Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.