India could see stronger capital inflows as investors turn to emerging markets, according to James Knightley, Chief International Economist at ING. He said India’s economic fundamentals appear favourable, with global funds likely to look beyond highly valued developed markets.

“For India, things are certainly moving in the right direction,” Knightley told CNBC-TV18, adding that many investment houses are now speaking more positively about equity markets in Asia. “We’re looking at what’s going on in Asia as being a more interesting story, given the valuations that we’ve got in the United States and also to a certain extent Europe as well,” he said. He suggested that India’s relatively muted equity performance could soon draw fresh investment.

In the US, Knightley said the end of the gover

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