India's great expectations

India stands at a crossroad. While Prime Minister Narendra Modi’s election in 2014 ushered in an unparalleled amount of optimism for Indian economic growth prospects, India has not yet met its great expectations. By almost all economists’ estimates, India since 2015 has been growing at a larger rate (slightly over 7%) than any other major economy. However, India has not become an engine of robust growth that the dry bulk shipping market so desperately needs.

Overall, the future for India remains unclear and the dry bulk market cannot assume that India will simply replace China. Key gauges of Indian industrial strength relevant to the dry bulk market show only moderate growth occurred last year and Commodore Research believes that no drastic change will occur in upcoming years. In addition, the extremely large jumps in industrial production that were seen in China earlier this decade are very unlikely to occur in India. India is also not expected to bring about a significant change in overall global seaborne grain trade in the foreseeable future. The most reasonable outcome to expect regarding Indian growth and dry bulk prospects is that India will continue to grow at only a moderate rate. The dry bulk market is most likely to remain without an engine of robust growth now that China has lost its steam.