India – The Asian giant

 

July 2023 | 2 min read   

India – The Asian giant

India is one of the fastest economies in the world and is poised to grow even more in the future. The nation has been at the centre of a discussion at the Amundi World Investment Forum, which took place on 22 and 23 June 2023.

Dinesh Kumar Khara, Chairman of State Bank of India, and Amitabh Kant, India’s G20 Sherpa¹, highlighted the main elements that, in their view, make India an unmissable investment opportunity: 

• India is an economy that can benefit from a growing workforce, abundant natural resources, the skills and the desire to “prove itself” in the international arena. The country has a GDP of $3.7 trillion and is currently the fifth largest economy of the planet. It is recording a huge internal demand and is attracting investments from all over the world.

• The Indian Government is investing on green infrastructures and clean energy. The nation has low political risk and it is considered the world’s largest democracy. In the context of the coming national and state elections, the current prime minister enjoys wide popular support and has been in power for the last 9 years.

• With an average age of 29, the share of working population as percentage of the total population has yet to peak, and this is a great competitive advantage. Through digitalisation, many young Indians are employed by outsourcing companies. The new reforms in education are preparing Indians to the future job market, and is foreseen that almost 25% of the global workforce will be provided by India by 2035.

• Thanks to the major reforms such as the ones on insolvency, bankruptcy code, formalization of the economy, there has been an increase in investments in different sectors. India is set to become the first country to industrialize without massive carbon emissions and will be an important hydrogen hub in the future.

• Infrastructure has been one of the major growth drivers during Covid-19. Private capitals have also supported this sector, propping up growth and bolstering the economy. Estimates show that the GDP will grow by 6.5% this year, but the economic activity “on the ground” supports a more optimistic view (7%). There is confidence that this will be the figure for the next years to come, and India will soon become a developed economy.

• The world looks at India today. The country offers multiple opportunities to foreign investors, as the nation’s and global goals are aligned (fighting climate change, SDGs, digital transformation). India has disrupted multiple fields, with ground breaking innovations in the digital ecosystem and has a lot to offer to the world.

• All major firms are currently investing in the country. Equity valuations are positive and better than the ones in China and other EMs. India is mostly known for its services, but it is becoming a resilient part of the global supply chain for electronics and consumer goods.

• There is optimism about India’s future. A lot has happened in the past decade, and the country is now more open to foreign direct investment (almost 95% does not need prior approval). Thanks to the consistency of economic policies, infrastructures, reforms and low corporate tax India is a place where it is easy to do business. The start-up ecosystem is also dynamic and many Indian firms are now investing abroad.

In conclusion, thanks to its strong demographics, political stability, solid economic fundamentals and a vibrant start-up landscape, our speakers conveyed that investing in India today means investing in the future. 

Watch the full session: