Geoffrey Dennis sees money moving from China to India

India is emerging as the brighter spot among developing economies, said Geoffrey Dennis, Independent Emerging Markets Commentator, who believes that “some rotation from China into India may make a fair amount of sense now.” He stated that while China’s markets have run up sharply this year, India offers a more stable macro picture with low inflation, room for interest rate cuts, and steady reforms such as goods and services tax (GST).Dennis added that oil prices are “in a good range,” and the Reserve Bank of India still has “tremendous scope to cut interest rates,” making the country’s economic outlook stronger relative to peers.

According to Dennis, India’s fundamentals remain well supported. The economy is resilient, inflation is manageable, and valuations have become more reasonable compared with China. These factors, he said, create an encouraging backdrop for investors looking at long-term exposure in emerging markets.

He also highlighted that corporate activity globally is likely to pick up, supported by falling borrowing costs and a friendlier policy environment. With “interest rates starting to come down” and “corporates holding plenty of cash,” Dennis expects more mergers, acquisitions, and other corporate actions ahead.

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On China, Dennis remains cautious. Despite optimism around artificial intelligence (AI)-led investments, he stated that “the economy is still very soft, in particular consumer spending and housing,” and warned that the recent rally may have gone too far too soon.Beyond the China-India story, Dennis pointed out that the broader emerging markets have had a stellar year, up over 30% and outperforming developed markets by 1,200 basis points. Countries such as Korea, Brazil, and Mexico have all contributed to the gains, showing “broad-based emerging market (EM) momentum.”

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Even with the US dollar rebounding recently, Dennis stated that emerging markets continue to hold strong, a sign that fundamentals rather than currency trends are now driving performance. Still, he advises investors to stay cautious. While 2025 has been an “incredibly good year” for emerging markets so far, Dennis warns that if the dollar strengthens further, the rally could slow — suggesting that “cautious optimism” is the right stance for now.

For the entire interview, watch the accompanying video

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