Featured in Moneycontrol: India better placed as dollar weakness looms, says economist

India is better placed than many emerging markets to benefit from a weaker U.S. dollar, thanks to its strong domestic demand and policy credibility, according to Adam Wolfe of Absolute Strategy Research.

India is better positioned than many emerging markets to ride out a potential period of US dollar weakness, thanks to strong domestic demand, healthy reserves, and improved policy credibility, according to Adam Wolfe, Emerging Markets Economist at Absolute Strategy Research.

Speaking at Ashwamedh – Elara India Dialogue 2025, Wolfe said the dollar appears to be shifting into a weaker cycle after a decade of strength, driven by moderating U.S. growth and narrowing interest rate differentials. However, he cautioned that emerging markets may not enjoy the kind of broad-based boom last seen from the late 1990s to 2011.

“From the late 1990s to 2011, emerging markets enjoyed a golden age. Growth surged, currencies strengthened, and capital inflows were strong. We may be heading into another period of dollar weakness, but I don’t think EMs are set for a repeat of that golden era,” Wolfe said.

While earlier EM outperformance was fuelled by China’s rapid industrialisation, a commodity super-cycle, and favourable demographics, those tailwinds are weaker today. “The next decade for India may not look like China’s past, but India can still deliver steady, robust growth. That should attract capital, especially as investors look to diversify EM exposure away from China,” Wolfe noted.

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