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With growth concerns to intensify globally in 2023, India's growth trends may remain resilient given the country's macroeconomic stability and well-controlled inflation, foreign brokerage Credit Suisse said in a report.

"Key trends to watch out for in 2023 are the sustainability of credit growth, equity inflows and solid corporate earnings momentum, which were the key drivers of India's outperformance in 2022. These trends should persist, in our view, and keep India's valuation elevated. We expect moderate returns in 2023 and would selectively buy on dips given our constructive view of the Indian market in the medium term," it said.

Amid the slowdown in growth globally, India's macroeconomic fundamentals appear to be more stable thanks to the combined efforts of the Indian government and the Reserve Bank of India. These efforts have led to a sharp improvement in the health of India's banking system, robust tax collections, healthy foreign exchange reserves and well-controlled inflation. Additionally, a sharp decline in commodity prices could provide some relief to India's current account deficit, which was a key concern till now, the report said.

On the growth front, several economic indicators like GST collections, manufacturing PMIs, non-food credit growth, and industry utilisation indicate healthy economic momentum, it added.

"We expect domestic demand to remain resilient, led by a pickup in government spending and private capital expenditure, a recovery in real estate and government initiatives (like Production Linked Incentive Schemes) to boost the manufacturing sector," the report said.

While India may not be fully insulated against global headwinds and some slowdown from higher levels is likely, its healthy domestic macro environment does provide a partial offset. "We find the pace of India's economic growth  one of the highest globally quite encouraging, especially as other major economies slow," Credit Suisse said.

The inclusion of Indian bonds in global bond market indices is also one event that, if it happens, can have a positive effect overall on Indian bond yields and capital flows. "However, we assign a low probability of it happening in 2023 as issues related to taxation and settlement still need to be ironed out," the report said.

The year 2022 showed resilience in domestic investor inflows (about $36 bn) into Indian equities despite heavy outflows (about $17 bn) by foreign portfolio investors (FPI), lending support to the equity market. Domestic institutional investor ownership of the BSE 500 companies has reached a record level of around 15 per cent and become equally meaningful, while FPIs have reduced their relative dominance as their ownership is at a nine-year low of 18.3 per cent.