Pharma, textiles are safer bets today

Textile businesses are priced at lower valuations and could have a greater upside

Most people underestimate India's import sensitivity. On an average, World Bank data shows that imports have been around 26 per cent of Gross Domestic Product (GDP) in the last ten years and imports have never fallen below 21 per cent of GDP since 2009-10.

The connection to crude prices is clear. In FY 2010-11, and 2011-12, when the price of the Indian crude basket trended above $100/barrel, imports rose above 30 per cent of GDP.  In 2015-16 and 2016-17, the crude basket was priced at $46-47/barrel and imports fell to 21-22 per cent.

Exports have stagnated in the past six years. Exports