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 India is not immune to the global economic headwinds though it is better positioned, a senior official of BNP Paribas Securities India Pvt Ltd said on Thursday.

Kunal Vohra, Head of Research, also said the company is cautious on the overall market returns in the near term.

"Amid slowing global demand, lofty market valuations, a slowdown in retail flows, and lack of positive catalyst for our earnings estimates, we remain cautious on the overall market returns in the near term," he said.

Vohra noted that India's 1QFY23 gross domestic product (GDP) growth of 13.5 per cent was lower than forecasts of Reserve Bank of India (RBI).

While exports have moderated month-on-month on weakening global demand, imports remain elevated, deteriorating India's current account deficit (CAD).

High CAD, along with potential FPI outflows, are likely to keep the depreciating bias on the rupee and strain India's forex reserves.

On the positive side, India's inflation is lower than in developed economies due to the composition of the consumer price index. Raw material costs have cooled, which should ease the trade deficit. Another normal monsoon should keep food inflation in check, with GST collections remaining robust at a three-year CAGR of 13 per cent, Vohra said.

Amid slowing global demand, lofty market valuations, a slowdown in retail flows and lack of positive catalyst for earnings estimates, he said BNP Paribas is cautious on the overall market returns in the near term.