"India has indicated they are going to reduce the subsidies, and reducing the subsidies is going to increase the prices that we have locally, O'Hanlon said.
As India works to fight inflation, O’Hanlon believes that further quantitative easing (QE) should be avoided, "They can sort the fiscal and monetary policy out themselves, it will happen in time. The one issue they can’t sort out is another round of QE from Western politicians and central bankers which might force oil prices even higher."
The BRICnations of Brazil, Russia, India and China have criticized loose Western monetary policies. In a joint statement, they said growth prospects may be hurt by volatile capital flows and fluctuating commodity prices .
"They need to convince the Western politicians and the central bankers that it is not in their long-term interest to keep putting these inflation problems towards the BRICs which of course will cause them to keep interest rates very high and slow down their economy," O’Hanlon said.
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