$6T Exit India: US Speeds Up Harvest

Here is the translation of the provided text into English: "A surge in short positions, a plummeting stock market, and a rapid outflow of hot money.

The vibrant and colorful nation of India is being indiscriminately harvested by the United States.

Every time the dollar tide sweeps across the globe, the U.S. greedily sucks the sweat and blood of other countries.

The U.S. has already targeted Vietnam, South Korea, and Japan, and now it's India's turn for the main event.

Isn't the U.S. currently transferring manufacturing to India?

Why then does it still reach out its 'claw' to India?

Shorts have hit a 12-year high.

India's real estate and stocks have been soaring in the past few years, and the total market value of the Indian stock market once surpassed that of the global financial hub of Hong Kong, ascending to the throne of the world's fourth-largest stock market.

However, it was unexpected that by 2024, an election year, the situation has taken a dramatic turn, becoming unstable.

The net short positions in Indian stock index futures held by global funds have suddenly skyrocketed to 213,200 contracts, breaking records and setting a new high for the past 14 years.

This net short position is actually the difference between the short and long positions held by global funds.

It seems that the concern or bearish sentiment of foreign investors towards the Indian stock market has reached its highest point in 12 years.

But why is that?

There are two reasons.

First, the continuous interest rate hikes by the U.S. dollar have led Wall Street capital to withdraw from India in search of higher investment returns.

Second, investor concerns about the election results in India are also an important reason for the capital outflow.

This time, Prime Minister Modi's Bharatiya Janata Party may not get as many seats in the election as expected.

If Modi's election results are unexpected, the continuity of his previously vigorously promoted policy reforms, such as infrastructure construction and the revitalization of manufacturing, may be greatly reduced.

Capital naturally has a risk-avoiding attribute, and when faced with such uncertain black swans, you would rather earn less than suffer huge losses.

Wall Street capital is very adept at this and naturally does not want to waste more time on India.

Foreign capital is fleeing India on a large scale.

The latest data reveals that in the fourth quarter of 2023, foreign capital, including Wall Street capital, net sold more than 31 trillion rupees in shares, equivalent to $37 billion.

In April, about $4 billion fled the Indian stock market, and in the first two weeks of May, foreign investors withdrew as much as 288.85 billion rupees, with the withdrawal rate intensifying month by month.

This has led to a sharp decline in India's foreign exchange reserves.

According to the Reserve Bank of India's disclosure on May 1, the country's foreign exchange reserves have plummeted by 11.2% compared to the same period last year.

If this situation continues, India will face the greatest difficulties in decades.

India's maritime neighbor, Sri Lanka, declared bankruptcy last year, an important factor being the outflow of dollars, leading to the exhaustion of a single dollar foreign exchange reserve.

However, many daily necessities for the people depend on imports, and without foreign exchange, imports are impossible, and without money to repay debts, bankruptcy is forced.

Of course, although India's foreign exchange reserves have declined, they are still within a controllable range.

If the foreign exchange continues to shrink, India may face the same problems as Sri Lanka.

It also depends on whether the dollar will cut interest rates and whether Modi can win the election, otherwise, this thunder will lead to more Wall Street capital outflow.

Wall Street is frantically harvesting India, this emerging economy, whose growth potential is definitely not to be underestimated.

After all, it is now the world's most populous country and is still growing.

So the question is, why is India always looked down upon one after another?

In fact, to put it bluntly, it's all because of the U.S. harvest.

Under such a big background, India can be said to be in a dilemma of being besieged on all sides.

On the one hand, the Fed's continuous interest rate hikes are causing the Indian economy to 'bleed'.

On the other hand, foreign funds are beginning to flee the Indian market one after another.

It is obvious that when the U.S. economic situation deteriorates sharply, India is also mercilessly thrown aside by the U.S. Of course, being abandoned by the U.S. is not the worst situation.

The Indian economy may face the risk of regressing 20 years, which is the most headache for Indian Prime Minister Modi.

You have to understand that in recent years, due to the poor domestic economic environment in India, foreign investment enthusiasm for India has greatly decreased, for fear of getting into trouble and being fined.

Moreover, in order to promote the development of domestic manufacturing, the Indian government has taken a series of measures to restrict the import of foreign electronic products.

This move undoubtedly made many foreign-funded enterprises feel disheartened.

Under the influence of these multiple factors, the prospects for India's economic development are not as optimistic as Modi said.

Finally, let's take a look at a typical example of India's sluggish economy.

Three years ago, the Indian government announced that it would invest as much as 6.92 trillion rupees in the construction of domestic infrastructure projects such as roads and bridges.

However, until today, we still cannot see any substantial improvement in India's infrastructure.

If it's not really a lack of money to spend, then Modi probably can't find any other reason to explain this matter.

In fact, India's economy has serious hidden dangers, with external debt accounting for 78% of foreign exchange reserves, and inflation has reached 7%, setting a new high for 17 consecutive months.

However, in the face of the U.S. debt and inflation risks, it seems inevitable for India to be 'harvested'.

More seriously, India's current unemployment rate has risen to double digits, and the enthusiasm for applying for civil servants has also increased.

The domestic wealth gap is serious, and while the economy is developing rapidly, the lives of many Indian people have become more and more difficult.

In the face of internal and external troubles, India has turned its attention to non-Western countries, including Iran, Saudi Arabia, China, etc.

Recently, India signed a ten-year port development and operation agreement with Iran, which is surprising.

Although Iran is still subject to U.S. sanctions, India has established a cooperative relationship with it despite the opposition of the Biden government.

It is particularly worth noting that the main supporters behind the current Israeli-Palestinian conflict are the U.S. and Iran, which shows that the two sides are in a state of covert competition, and India's choice at this time undoubtedly puts pressure on the Biden government.

So, is India's investment in Iranian ports limited to operation and development?

Obviously not.

As a country with a large population but limited resources, India has a huge demand for fossil energy, so the primary purpose of cooperation with Iran may be to obtain oil resources.

In response, the U.S. quickly issued a warning to India to be cautious about cooperation with Iran.

In addition, the tense situation between India and China is also gradually easing.

It is reported that the Chinese and Indian troops have achieved disengagement at four locations in the west, which is a result that both countries want to see.

Because the confrontation between the two countries is not beneficial to either side, and will instead consume national strength, which is also what the U.S. is happy to see.

In addition, India has reached a deal with Russia, that is, India will sell weapons and equipment to Russia, which is undoubtedly a strong response to the U.S. call to 'not support' Russia.

India is facing internal and external troubles and has made adjustments from multiple aspects, and has also seen the true intentions of the dollar.

Although it is still too early to say that the dollar has lost its international currency status, after this round of dollar interest rate hikes, the global share of the dollar will definitely not return to the status before 2021.

The dollar will only become a regional currency among the Five Eyes countries and Japan and South Korea, with the same status as the euro and the renminbi.

If India wants to truly rise as a major country, an independent and autonomous foreign policy is very important.

Learn from past mistakes and remember the lessons."