USD Investment in India Has Peaked

If we look at the investment chart of US dollars in absolute amounts since 1990, i.e the year when controls over the USD were removed aka liberalization, enthusiasts of Elliot Wave Theory would see that the impulsive third wave is over. The entire impulsive third wave move took 10 years.

The downwave from about 14,000 is the wave A or so we can assume. The next few years will find it difficult to see the same peaks of USD investment in India in absolute terms, irrespective of the value of the Indian rupee versus the USD.

This can only point to a churn as the USD investment sees a 4th wave corrective. Do note that this corrective can go right down to 2,500 level. However, optimistically, it would do a triangular movement.

The scenario thus does not augur well for the Indian economy. It points to the fact that interest in emerging economies would be on the wane or at least muted. To maintain the bull run, the Indian rupee would have to be devalued to allow an export-oriented economy to flourish.