Since the beginning of this year, the Indian stock market has continued to rise, making it one of the best performing stock markets in Asia and even emerging markets. The main benchmark stock index, Nifty50, has risen by over 13% so far this year. On December 6th, driven by financial and energy stocks, the market value of the Indian stock market broke through the $4 trillion mark for the first time. Second only to the United States, China, and Japan.

A report released last Thursday showed that India's gross domestic product (GDP) grew by 7.6% year-on-year in the three months ending September, higher than economists' expectations. This number is also significantly higher than the Reserve Bank of India's 6.5% forecast. The GDP of the first fiscal quarter (April June) was 7.8%.

According to Bloomberg statistics, the market value of securities listed on two Indian exchanges has doubled since the low point of the pandemic in March 2020. If the current upward trend is maintained until the end of the year, the Indian stock market will set an unprecedented eight year consecutive rise record.

The Indian government clearly has ambitious goals in promoting economic growth in India. According to S&P analysts, the goal of the Indian government is to become a focus of investment for foreign investors and a manufacturing powerhouse, and their main means of achieving this goal is to promote the development of manufacturing and exports through the Production Linked Incentives (PLIS) program.

However, India still faces some headwinds on its economic growth path.

Morgan Stanley believes that the biggest risk factor may be a medium to long-term recession in the global economy, as India is a highly dependent economy on international trade, with nearly 20% of its economic output used for exports. The Indian Ministry of Finance stated last week that a global economic slowdown may affect the prospects of India's export business.

Other risk factors include insufficient supply of skilled labor, unfavorable geopolitical events, and government decision-making errors.