India is now in a better position to withstand a Fed rate hike: Chief Economic Advisor

Markets have been in a state of fear on account of speculations that the US Federal Reserve may hike interest rates. So every time Fed sneezes, the emerging markets across the globe catch cold, and India is one amongst them.

But this time situation is no more the same. Chief Economic Advisor Arvind Subramanian told ET Now on Tuesday, India is in a better position to handle the US Federal Reserve rate hike as compared to the past two years.

He said, "I think we are in a much better position to handle this (tapering) because our macroeconomic situation is very different and also because I think it is not going to be a shock like it was earlier...As long as India's growth continues, we are still a good attractive place to invest in."

The 56-year-old said he does not see oil prices going beyond $80 to $85, and this will help India manage its macro economy reasonably well.

At an interaction conducted by Bangalore International Centre and Indian Institute for Human Settlements, Subramanian said, "Oil prices could go up, but given the fundamental changes (in the market), the likelihood of it (oil price) going up to anywhere beyond 80 or 85 dollars, I (think) relatively (should be) ignored, and as long as oil prices stay, don't go beyond that, I think we can manage our macro economy reasonably."

According to an Economic Times report, Subramanian said there have been fundamental shifts in the market, and he believes this is why demand has come down.
(Image: The Economic Times)