Barclays: India Is on the Rise

London-based 327-year-old Barclays PLC says: With a rapidly growing middle class, a young labor force, and a reform-minded government, India is on the rise.

With a GDP of nearly $2.5 trillion, —  and one of the highest GDP growth rates in the world — India ‘s GDP is outpacing emerging markets; the country now holds investment-grade borrower statusSeveral factors are combining to create a virtuous cycle that heralds sustainable growth

Anti-corruption Reforms — the ban on high value rupee notes in November 2016 was a bold anti-corruption measure. Another of its anti-corruption initiatives is the Aadhaar program where over a billion Indians have enrolled in the universal ID program – the largest biometric identification system in the world that among other benefits ensures wider financial inclusion of the country’s people.  

Indian flag

Long Term Investment — In order to attract long-term investments, the Government of India has eased limits on foreign direct investment (FDI), simplified regulations, implemented the integrated goods and services tax, and has undertaken planned urbanization. India is a top prospective host economy for FDI for 2017-2019.

Growing Labor Force — More than 10 million people join India’s productive labor force every year. The average age of India’s productive workforce is 27 – a decade younger than China’s and America’s workforce – and most people are expected to continue working until 2050. India’s population is projected to remain one the youngest for the foreseeable future.

Strong Macro Fundamentals — India has been able to circumvent high inflation, high fiscal and current account deficits, and pressure on the currency and interest rates with careful monetary and fiscal policy — its current account gap, as a proportion of GDP, has narrowed rapidly over the last four years. Real GDP growth has averaged around 7.5% Year-on-Year since 2014, up from about 6% in previous years.

November 21, 2017   No Comments

Moody’s Upgrades India’s Rating

New York City-based  Moody’s Investors Service‘s upgrading India’s sovereign credit rating for the first time since 2004 to Baa2 from Baa3, and changing the outlook to ‘stable’ from ‘positive’, is a boost to the Modi government’s reform agenda.

Bloomberg says that the upgrade adds to a string of good news for Modi. The World Bank said it’s getting easier to do business in India, with Asia’s third-largest economy jumping 30 places to rank 100th in the latest ranking released last month. Earlier this week, Pew Research Center said Modi remained a popular leader and public confidence in the economy and the overall direction had improved.

A poster saying 'analysis'

  • India is the largest economy among all Baa2-rated sovereigns
  • The Philippines is the only other Baa2-rated country in Asia
  • India ahead of other BRICS — Russia-Ba1, South Africa-Baa3, Brazil-Ba2
  • Among BRICS, only India, China and South Africa are investment grade
  • On a PPP basis, India’s GDP per capita has outstripped the Baa-rated median (19 countries)
  • Between 2006 and 2016, this grew 108% vs. 74% for Baa-rated median
Moody’s forecasts GDP growth of 6.7 percent for the fiscal year through March 2018, with a pick up to 7.5 percent in the following year and “similarly robust” levels from 2019 onward — that’s in line with the median 6.8 percent and 7.4 percent estimates in a Bloomberg survey.



November 19, 2017   No Comments

Pew Research: Modi’s Popularity Widespread in India

The Pew Research Center, a nonpartisan American think tank based in Washington, D.C., conducted a survey among 2,464 respondents in India  from February 21 to March 10, 2017.

Its main findings are:

  • Indians are increasingly upbeat about Prime Minister Modi, the economy and India’s direction
  • Modi’s popularity extends across India — Nearly nine in ten Indians hold a favorable opinion of Modi, comparable to their view of him in 2015, after a year in office.
  • Modi and BJP are more popular than the Gandhis and the Congress Party — Modi’s favorable rating is 31 percentage points higher than that of Sonia Gandhi, the leader of the Congress Party, and is 30 points more than that for her son, Rahul Gandhi.
  • The public is satisfied with Modi’s  handling of domestic issues — helping the poor and handling unemployment, terrorism and corruption.
  • The Indian public believes the national government is doing the right thing for the country — More than 85 percent voice trust in the national government, including 39 percent who express “a lot of trust.”
  • The public is also quite satisfied (79 percent) with the way their democracy is currently working. This includes 33 percent who are very satisfied.
  • Despite a decline, the U.S. is still more popular than China — about half of Indian adults hold a favorable view of the United States, down 21 percentage points since 2015. (Amritt interpretation: this decline is probably attributable to some of the words and actions of President Trump).
  • Indian assessment of Americans (56 percent) remains positive and largely unchanged since the last time this question was asked.
PM Narendra Modi

PM Narendra Modi




November 18, 2017   No Comments

Atlantic Council Proposes Recommendations for India

In its report The Sino-Indian Clash and the New Geopolitics of the Indo-Pacific authored by the South Asia Center of Washington-based Atlantic Council made a series of recommendations to help India meet security challenges.

Highlights of the Report authored by Robert A. Manning and Bharath Gopalaswamy, as reported by Live Mint are:

  • India should propose regular India-U.S.-China talks at least on an annual basis, perhaps on the margins of the G20 or the East Asian Summit meetings aimed at minimizing the risk of misperception or miscalculation.
  •  India and the U.S. should enhance joint maritime patrols in the Indian Ocean.
  • United States and India must boost bilateral security cooperation in the Asia-Pacific.
  • India should also seek assistance from Japan and the United States in developing its indigenous shipbuilding capabilities and should consider permitting Australia to join the Malabar exercises to resurrect the initial Quadrilateral grouping.
  • India should improve its carrier aviation capacity, which will help maintain sea control in the Indian Ocean.
  • The United States can play a major role in helping India modernize its unmanned aerial vehicle fleet.
  • India must seek to improve its space surveillance capacities. India already possesses a developed space program which it must utilize to serve practical military needs.
  • India should establish forward bases to advise the militaries of neighboring countries. India could set up a brigade for each South Asian nation (other than Pakistan), which would take on the responsibility of training and advising the militaries of those countries.
  • India could also create a satellite campus of the National Defense Academy, or an entirely new academy, to train greater numbers of Bhutanese/ Nepali/ Bangladeshi/ Sri Lankan troops in India.

The report noted that as a democracy and a committed market-oriented economy, India appears more focused than China on the rules-based global order, while trying to build a larger role and expand its voice and influence within it.

Flags of US and India

November 11, 2017   No Comments

India Improves Investor Appeal

You may want to take a fresh look at business opportunities and investments in India, if a new World Bank report is to be believed.

In November 2001, Goldman Sachs published a landmark paper where they identified India, along with Brazil, China, and Russia as the four “BRIC” economies that the world needed to watch. Many companies and investors began investing in these countries.

In 2002, the World Bank launched a project to rank the Ease of Doing Business in countries across the world. For well over a decade, more than 135 countries ranked better than the world’s largest democracy — India continued to be stymied by red tape, limited infrastructure and an army of bureaucrats who seemed to revel in creating complex, conflicting, and even arbitrary rules. India ranked worst among the BRICs and many companies mitigated their enthusiasm for India as a result. Persistent players such as Abbott, Accenture, Boeing, Coca Cola, Cummins, Deloitte, Exxon Mobil, GE, Hewlett Packard, Mylan, Oracle, PepsiCo, Vodafone and Western Union thrived despite some setbacks.

In our consulting, we always advised clients to look at specific Indian states, rather than the entire subcontinent when locating sales offices, subsidiaries, or manufacturing plants; some states welcomed businesses while others did not care. For the first time in India’s 67-year-old democracy, the leader (Chief Minister) of a state was elected as Prime Minister in 2014. One of Prime Minister Narendra Modi’s first goals was to improve India’s business environment.

The latest report from the World Bank, “Doing Business 2018“, published this week, shows that India made important reforms in six of the eight areas that the Bank measures for its report. Small economies can pass reforms relatively easily and it is important to note that Nigeria and India are the only large economies to make significant improvements as shown in this table:


To global companies and investors, it is even more important to note that India jumped by 30 ranks overall to go from 130 to 100 and leapfrogged over Brazil, which is stagnant at 125. Such an improvement in just three years since the new government took over is quite remarkable. The juggernaut of the BRIC countries is China and it is currently ranked at 78. If Modi’s government can keep up the momentum, it is not inconceivable that India might vault ahead of its autocratic neighbor in three to five years.

We often help clients to start a new company or office in India and that process has improved considerably. Getting credit and obtaining construction permits for a business has also become easier according to the World Bank’s research. Minority foreign investors in India felt vulnerable in the past but new procedures protect them a bit better while enforcing contracts might also become easier once the new National Judicial Data Grid starts paying results. Paying taxes electronically is becoming the norm and import of goods is being streamlined with more and more online functions for customs clearance.

Does this mean that India is an easy place to do business now? Not at all. The World Bank only measures a few criteria. Foreign companies have many challenges in India: the weather, the pollution, the current government’s tendency to place non- tariff barriers, even occasional price controls, and most importantly the illusion that they can readily understand India, just because they can understand their Indian-American physician.

Skeptics may ask, will progress continue? What if Modi’s party loses the next general election, scheduled in 2019? One major initiative that cannot be rolled back is that the states of India were encouraged to compete with each other for foreign and domestic investment. State leaders in Andhra Pradesh, Telangana, Maharashtra and at least seven other provinces and territories have led the charge in improving their own attractiveness. This genie cannot be put back in the bottle and we anticipate that up to 20 of India’s 29 states will join the race shortly.

If you have questions about how your company can do better in India or if you want to take a fresh look, Contact Us or drop me a note here on Linked In.

November 2, 2017   No Comments