Indian equities: little to get excited about Imagine the job specification. Head of central bank overseeing slower economic growth, rapidly depreciating currency, stubborn inflation and high fiscal and current account deficits. Worse, Raghuram Rajan, newly appointed to the Reserve Bank of India, knows there is only so much he can do. Investors, therefore, must focus instead on the machinations of government and its ability to pass financial reform. In the run-up to an election year, progress looks unlikely. That makes it hard to get excited about equities. After recent falls, the benchmark Nifty index is still up almost 4 per cent from a year ago. It trades on almost 13.4 times forward earnings - slightly above its historical average. But earnings growth is expected to slow. Goldman Sachs notes that a third of the debt held by India's biggest listed companies is held overseas. A weak rupee will lead to higher interest payments. As the central bank tightens liquidity to arrest the fall in the rupee, investment will struggle too. This is bad news for the already highly leveraged corporate sector. At construction companies such as Jaiprakash Associates and IRB Infrastructure, net debt is well over five times earnings before interest, tax, depreciation and amortisation. Companies with high energy needs such as Ambuja Cements will suffer from the higher price of imported coal. The weak rupee is not bad for everyone, especially those who earn revenues overseas. Shares in Tata Consultancy and HCL Technologies have rallied almost 50 per cent this year. Tata Motors, which released first-quarter earnings on Wednesday, reported a fall in domestic revenues offset by strong growth at its overseas Jaguar Land Rover division. Almost $11bn in foreign funds have flowed out of India in the two months since the Fed first talked of tapering. Yet most of this has come from bonds. It is equities that look vulnerable.