2024-03-18 12:26:16
The fifth economic power in the world, India, is attracting more and more foreign companies and investors who are trying to reduce their dependence on China in the context of economic and geopolitical problems, reports AFP, quoted by BTA.
Chinese authorities admit there are “hidden economic risks” in certain sectors, as foreign investment in them fell 82 percent last year to $33 billion. India also reported a decline in foreign investment, but it was far less, and the volume exceeded that received from China.
Faced with diplomatic and trade tensions between Washington and Beijing, and after the problems created by severe restrictions during the pandemic in China, several major players in the technology sector decided to take advantage of an Indian government subsidy program for new factories and began to diversify production you are.
American Apple, whose presence in India before 2021 was insignificant, already plans to produce at least a quarter of its iPhones in this country. According to JPMorgan analysts, this goal will be achieved next year.
One of Apple’s main suppliers, Taiwan’s Foxconn, has also invested heavily in India. In 2023, for example, the company bought a huge piece of land in the south of the country. According to its president Yun Liu, Foxconn has the potential to invest “several billion dollars” in India.
Samsung, Google, HP and Dell are also showing interest in investing in India.
India offers some of the best growth opportunities in the Asia-Pacific region and in terms of financial markets, according to investment bank Goldman Sachs. Mumbai’s stock market capitalization at the end of January overtook Hong Kong to rank fourth in the world behind Shanghai/Shenzhen and Tokyo, according to Bloomberg data. And “Morgan Stanley” (Morgan Stanley) predicts that by 2030 it can rise to third place.
“There is a flight to safe and quality assets by investors leaving China and looking for other markets with attractive returns,” said Aninda Mitra, Asia strategist at US bank BNY Mellon. In his view, however, in the long run, Indian growth deserves attention in its own right, not simply as a mirror of what is happening in China.
And while China’s economy teeters between a real estate crisis and weak consumption, India’s gross domestic product (GDP) tripled between 2006 and 2021, and the Indian government is forecasting more than 7 percent annual growth over the next two years. Prime Minister Narendra Modi aims to make the country the world’s third-largest economy during the new term he will contest in May.
Strong population growth in India, the world’s most populous country as of last year, is an important factor behind this increase in GDP. However, Mitra points out that there are many challenges in the workforce’s transition to industry that create a risk of “social instability”.
Olivier Marie, a director at Europe’s leading asset manager Amundi, hailed India’s economic and fiscal policy, which is heavily investing in infrastructure and industry. The company has registered serious interest in the Indian market from investors from Asia, Europe, the Persian Gulf and Latin America. Assets managed through its joint venture with State Bank of India, for example, rose to 230 billion euros at the end of 2023.
The share of Indian assets in the portfolios of “Morgan Stanley” among investments in emerging markets already exceeded the share of Chinese in 2022. The gap widened last year to 24.2 percent in Indian stocks versus 18.2 percent in Chinese – mostly banks, industrials and technology companies.