Never before has any country outside of the US -- including China and Japan -- had as many of its corporate leaders in the Forbes Rich List top ten as India has today. To make the case for opportunities in India would seem self-evident. After all, if a nation’s own people, who know the country the best, can make fortunes to compete with those in the world’s largest economy, then surely outside investors can also do well there. Yet, misconceptions still obstruct many investment decisions concerning India.
Meeting a California Silicon Valley billionaire who has returned to India is perhaps one of the more striking barometers of India’s potential. The most successful of the Indians who moved to the US in the 1960s, from an opportunity-shorn India, return today to capture the types of opportunities few, if any, other places on Earth can match. After all, no other major capitalist economy will come close to matching India’s growth for decades.
The opportunities of India in the 21st century mirror those of the US at the start of the 20th century. During the last century the US was transformed from a nation of the horse-and-carriage to a superpower that sent man to the moon. The Dow rose from 66 to 11,497, but this apparently huge gain shrinks to 5.3 percent when compounded annually. India today exceeds, and is projected to exceed, a return-rate of 5 percent. The baton of Rockefeller and Getty is now carried by Ambani and Tata.
India, with its real economy targeting eight percent growth for the foreseeable future, is far more likely to provide investment returns matching those of the US in the last century.
Of course, there are obstacles. The US was transformed in the course of a century by an extraordinary sense of perseverance, despite facing a range of challenges through the century. And that sense of perseverance is shared in today’s India.
Through the last century India’s challenges have been immense. Moving from a colonial past, with a shared sense of common purpose, India has been transformed into the world’s largest democracy. And, this year, India sent a spacecraft to the moon.
Investors will have to overcome obstacles that are not intrinsic to India. Thanks to organizations, such as UK Trade & Investment, which provide access and know-how on exporting from the UK to India, and the vitality of the UK India Business Council, small- and medium-sized enterprises’ (SMEs) access to India has become easier. And if SMEs from the UK do not seize the opportunities available, those from other countries certainly will.
To describe India in statistics would be to describe the Taj Mahal by its dimensions; you can do it, but it denies its aesthetic and historical value. But, like the Taj Mahal, India has impressive statistics. Consider these:
According to the US Department of Commerce, India has higher returns on foreign investment than China; by 2032 India will be one of the three largest economies in the world. In purchasing power parity terms it already is the third largest economy, a quarter of the size of the US economy, with 300 million consumers and the world’s largest pool of English speaking scientists and engineers. Every year, 75 million phone contracts and eight million TV sets are sold. By 2015 more than 63 million households are expected to have an income of more than $30,000 in purchasing power parity terms.
India, the seventh largest country in the world, has the second largest area of arable land in the world. It is the world’s largest producer of milk, sugarcane and tea and the second largest producer of fruit, wheat, rice and vegetables. Comparisons to the US are obvious. An economic superpower needs not just preserving and innovative people, but abundant natural resources and an openness to the capitalist ideal. India, like the US of last century, fits the bill.
Investment needs the assurance of heritage. And no other country can claim to have a richer heritage of innovation than India: This was the land of medicine; astronomy before the Greeks; navigation before the Romans. The numeral system used throughout the world originated in India. Dan Sheinman of Cisco says of working and investing in modern India: “We came to India for the costs, stayed for the quality and are now investing for innovation.” Indeed one-fifth of Fortune 500 companies have set up research and development centers in India and India is among only six countries in the world to have satellite launch capabilities.
It is little wonder, then, that this nation had the greatest GDP of any country on the eve of the formation of the British East India Company. There is nothing to suggest her people will not now resume their destiny.
