India Weekly: Falling inflation, trade uncertainty, equity underperformance

June inflation data, due next week, is set to show headline inflation dropping to 2.6% y/y — the lowest in over six years — driven by tumbling food prices. Despite this, the RBI is unlikely to respond with another rate cut. Meanwhile, there has been no announcement this week of a long-awaited India-US trade agreement, with agriculture apparently the key sticking point. Finally, Indian equities have lost their shine relative to EM peers recently, and we expect them to underperform over the coming year.