Category — India Market Expansion

Investor Outlines Macro Trends in India

Macro thinker and author of the institutional newsletter, Global Macro Investor, Raoul Pal, identifies big trends ahead of time and has 24,000 Twitter followers. He enunciates that the next big macro idea is India.

Pal says, “India has built the world’s first national digital infrastructure, leaping at least two generations of financial technologies and has built something as important as the railroad was to the U.K. or the interstate highways were to the U.S. India is now the most attractive major investment opportunity in the world.

Pal outlines 7 phases that has made India the biggest emerging market macro story in the world. Lightly edited excerpts follow:

Phase 1 – The Aadhaar Act

In 2009, India launched a project called Aadhaar, and began creating a biometric database based on a 12-digit digital identity, authenticated by finger prints and retina scans, to identify and document its population. As of 2016, 1.1 billion people  or 95% of the population now has a digital proof of identity.

Phase 2 – Banking Adoption

The Government of India  allowed the creation of eleven Payment Banks, which can hold money but don’t do any lending. To motivate people to open accounts, the government offered free life insurance, and linked bank accounts to social welfare benefits. Within three years, more than 270 million bank accounts were opened and $10bn in deposits flooded in. People who registered under the Aadhaar Act could open a bank account using just their Aadhaar number.

Phase 3 – Building Out a Mobile Infrastructure

Since people were able to instantly open a mobile phone account using their Aadhaar identification,  mobile phone penetration surged and went from 40% of the population to 79% within a few years.

The Unique Identification Authority of India, which administers Aadhaar, met with executives from Google, Microsoft, Samsung and Qualcomm, among others, to develop Aadhar-compliant devices which can integrate features such as secure cameras and iris authentication. Microsoft launched a lite version of Skype designed to work on an unstable 2G connection, and which is integrated with the Aadhaar database, so video calling can be used for authenticated calls.

Phase 4 – UPI – A New Transaction System

On December 30, 2016, the government launched Bharat Interface for Money, a digital payments platform using a Unified Payments Interface by which payments can be made by those with Unified Payments Interface accounts to those that do not have such accounts. Additionally, people can check their bank balances, and use QR codes for instant payments on this digital payments interface. Payments can now be made without using mobile phones — just using fingerprints and an Aadhaar number is required. This system works on a 2G network so it reaches even the most remote parts of India. It will revolutionize the agricultural economy, which employs 60% of the workforce and contributes 17% of GDP. Farmers will now have access to bank accounts and credit, along with crop insurance.

Phase 5 – India Stack – A Digital Life

India Stack is a framework that will make the new digital economy work seamlessly. It’s a set of APIs (Application Programming Interface) that allows governments, businesses, startups and developers to utilize a unique digital infrastructure via a presence-less, paperless and cashless service delivery.

Essentially, it is a secure Dropbox for a person’s entire official life and creates what is known as eKYC: Electronic Know Your Customer.

Using India Stack APIs, all that is required is a fingerprint or retina scan to open a bank account, mobile phone account, brokerage account, buy a mutual fund or share medical records at any hospital or clinic in India. It also creates the opportunity for getting instant loans and brings insurance to the masses, particularly life insurance.

India Stack is the largest open API in the world and will allow for massive fintech opportunities to be built around it. India is already the third largest fintech center but it will jump into first place in a few years. The country is already organizing hackathons to develop applications for the APIs.

Phase 6 – A Cash Ban

The cash ban of November 2016 forced everyone into the new digital economy. It has the hugely beneficial side-effect of reducing everyday corruption, recapitalizing the banking sector and increasing government tax take, thus allowing India to rebuild its crumbling infrastructure.

India was a cash society but once the dust settles, cash will account for less than 40% of total transactions in the next five years. It may eliminate cash altogether in the next ten years.

Phase 7 – The Investment Opportunity

The future for India is massive technological advancement, a higher trend rate of GDP and more tax revenues. Tax revenues will fund infrastructure – ports, roads, rail and healthcare. Technology will increase agricultural productivity, online services and manufacturing productivity.

Telecom, banking, insurance and online retailing will boom, as will the tech sector. FDI is already exploding and will rise massively in the years ahead as technology giants and others pour into India to take advantage of the opportunity.

Nothing in India will be the same again.

 

August 1, 2017   No Comments

India’s Solar Rooftop Installations Grow 81% Y-o-Y

India added 678 MW of rooftop solar capacity in 2016-17, growing at 81 per cent over the last year, reaching total installed capacity of 1,396 MW as of March 2017. The southern state of Tamil Nadu continues to lead in rooftop solar projects in the country. With an installed capacity of 163 MW as of March this year, the state outperformed all its peers in rooftop solar installations according to a report by Bridge to India, a global renewable energy consulting firm.

Industries are major drivers for rooftop solar installations in the country, contributing 590 MW. In Tamil Nadu too, the industrial segment contributed about 124 MW. State-owned establishments are expected to show robust growth in the coming years because of strong support from the government combined with 25-30 percent capital subsidies.

Bridge to India expects India’s rooftop solar capacity to cross the 2 GW mark during this fiscal, partly driven by several ongoing and recently completed rooftop solar tenders. The state-owned segment is expected to grow at  205 percent during this fiscal year, reports BusinessLine. Total rooftop solar capacity is expected to reach of 13.2 GW by 2021.

The interactive map found here depicts the number of solar installs in India. If you zoom in on a small area you can actually see a photo and details of each installation.

July 26, 2017   No Comments

Reliance India Offers a 4G JioPhone for “Free”

India’s Reliance Industries‘ chairman Mukesh Ambani launched the 4G-enabled feature phone, the JioPhone at the company’s annual general meeting. This mobile phone is free for 3 years with a refundable deposit of $23.

4G VoLTE-enabled JioPhone

 

India.com reports that the 4G VoLTE-enabled JioPhone is packed with features such as:

  • Unlimited voice, data, and texts for a data plan of $2.50 per month
  • Support for all languages
  • It is pre-loaded with Jio apps, a flashlight, an expandable SD card slot, a headphone jack, microphone, speaker and 4-way navigation
  • An intelligent voice assistant command option that can help users make calls, use Jio apps, search the web, and more
  • It includes an SOS feature and also supports FM Radio
  • Its “Jio Phone TV-Cable” can be connected with any television, not just smart TV

The move by Reliance can prove to be the next disruptor in India’s telecom market.

 

July 21, 2017   No Comments

Softvision, CA, Inaugurates Studio in India

Developer of digital products, Oakland, California based Softvision expands its base in India by launching a digital studio in Bangalore. The company plans to hire 500 software engineers in niche skill areas such as mobility, iOS, Java Scala and Android over the next 12 months.

Andres Angelani, CEO, Softvision, said, “In the digital age, technology helps foster connections that improve how products and services are delivered, and they have further evolved to meet all needs. This facility will house young minds that would help evolve the foundations on which the new digital journeys are created and run.”

Softvision logo

 “Our strategy is to tackle problems of the future from this facility with technologies like digital designing, which will help speed up the delivery of solutions to firms at a fast pace. We partner all the way to improve our clients’ digital maturity and this facility will be the many of such facilities we plan to set up across states in the country,”said Girish Karunakaran, senior vice-president, APAC, Softvision.

The company already has a presence in India with 800 software developers and testers working out of Mysore, located 90 miles west of Bangalore, reports BusinessLine.

July 20, 2017   No Comments

SAP Labs India Gains in Strategic Importance

SAP Labs India, SAP’s largest research and development center outside its headquarters in Germany, is steadily growing in strategic importance, says Stefan Ries, chief human resources officer of the company.

In an interview with the Economic Times, Ries said, ” The India center is gaining in strategic importance for us: the Fashion Management solution, which is used by Armani and Gucci, has been built entirely out of here. Our India footprint is steadily growing, adding 800-1,000 people to the overall headcount annually.

We recently inaugurated a new addition to our Whitefield, [Bangalore] campus — the Gerhard Oswald Innovation Space — built with an investment of €50 million [$57.52 million]. We will continue to make strong investments in our India center.”
SAP Logo

SAP India recently improved its learning and development process with its SAP Success Factor program where learning is a one-stop digital experience with 1.3 million opportunities available in the system. Employees can register their learning need and find solutions. The company will invest €160 million [$184 million] in learning this year, adds Ries.

July 20, 2017   No Comments