While global markets are turning inward and policy is starting to rewrite economic rules, India’s growth account can face more stimulating than expected resistance. The Aswath Damodaran assessment expert warns that the global environment in India is much less forgiving than that of China in the past.
“India will be faced with much more hostility from the rest of the world, while it is trying to develop, than China in recent decades,” he wrote in his latest blog article, Investing Politics: Globalization Backlash and Government Interruption.
While China has become large enough to support growth thanks to its domestic market, Damodaran suggests that the aspirations of India take place at a time when globalization is no longer ascending. “Globalization … has now, in my opinion, crest and faces a decline,” he wrote.
He traces the transition to the 2008 financial crisis, which, according to him, broke public confidence in global institutions and systems led by experts. This erosion, he argues, paved the way for political upheavals – Brexit, the rise of nationalist parties in Europe and the presidency of Donald Trump.
In Trump’s second act, Damodaran sees a more unresayed approach. “He has exercised prices as an army and is open to his contempt for global organizations,” he observes. While economists are concerned about long -term damage, Damodaran says that a large part of the public “applauds Trump”.
Damodaran, known for his evaluation ideas, also broke down which has won and who has lost the era of globalization. Among the winners: China, which now represents almost 38% of the global GDP growth (2010-2023); consumers, with more choices at lower costs; And the financial markets, which have become at the heart of public policy. Also in the circle of winners: global institutions, multinational societies and experts who shaped discourse in forums like Davos.
But there were clear losers. Japan and Europe have lost economic land. Small businesses and blue passes of the developed economies have enabled competition and relocation. “Manufacturing jobs culminated at nearly 20 million in 1979 and fell to around 13 million in 2024,” he wrote about the American experience. He also cites broader democratic erosion, where voters, even when they opt for change, have seen a policy dictated by “a global script”.
For Damodaran, these quarters of work are not abstract – they have a direct impact on the assessment of the company. “To assess businesses today, I have no choice but to bring economics and world policy that these companies live,” he wrote.
A company under this objective is Tesla. In 2024, he estimated the share at $ 182 and bought $ 170. But last year changed the story. Tesla is now faced with a real rival in Chinese byd, hybrids make a return, and the polarizing policy of the CEO Elon Musk has an impact on perception. “My value estimate for Tesla amounts to around $ 150 per share, around $ 30 less than my value last year and around $ 70 below its stock market course,” he noted.
