Category

Archive

Right Time, Right Place… Innovation’s White Heat burns more brightly in India

By Archive, India, News No Comments

The Duke of Devonshire was at his wit’s end by 1874: what should he do with that box of old papers? They weren’t as interesting as his grandfather’s work on inflammable air (don’t ask) or how to weigh the earth, both of which had brought the old boy, Henry Cavendish, a certain measure of fame, but recycling bins were still a century off and the subject of the papers, electricity, was starting to interest the public. So with unusual prescience (for him) the Duke gave the box to James Clark Maxwell (foremost scientist of his day) and Maxwell was impressed enough to name a laboratory after Henry Cavendish: within forty-five short years, scientists working in a small back lane in Cambridge at the Cavendish Laboratory had untangled the mysteries of electromagnetism, isolated the neutron and the electron and in 1919 went the whole hog and split the atom.

The rest, as they say, is history…

It’s the equivalent of striking the first flint spark and going on to build a fully functioning internal combustion engine within half a lifetime, but that’s what scientific innovation is all about: chance decisions (like the Duke’s), resolute determination and, most of all, being in the right place at the right time.

And right now, according to the Global Innovation Index, the right place is Bangalore, Mumbai and India where innovation is running white hot. The subcontinent rocketed up the Global Index last year and currently ranks 15th in R&D Expenditure worldwide.

Francis Gurry, Director General of WIPO (which compiles the Index), had no doubt about the importance of the subcontinent’s Silicon Ghaatee: “India is now consistently ranked amongst the top countries in innovation worldwide” he gushed.

And when it comes to those other two Cavendish ingredients, chance decisions and resolute determination, well the Modi Administration might be short on the former (not being in the habit of leaving anything to chance) but they’re definitely long on resolute determination: having already worked remorselessly for years to make the subcontinent a Global Innovation Hub.

But don’t take WIPO’s word for it, or mine, take a look at the evidence: the Atal Innovation Project is already inspiring a culture of innovation and entrepreneurship across India with Atal labs dotted everywhere; the Mangalyaan mission to Mars saw India become the first Asian Nation to send a spacecraft into orbit around the red planet and, of course, Chandrayaan 2 is currently on its way to land an exploratory craft on the Moon: prompting Prime Minister Modi almost to burst with the pride and enthusiasm of a new father: “Indian scientists are second to none…they are the best. They are world-class”.

But who would be rash enough to disagree? After all, whatever our preferred holiday destination might be for Donald Trump and Boris Johnson, just how many US or UK spacecraft are currently on their way to the Moon? Does the UK even have a spacecraft?

Nobody understands the fundamentals of the Indian economy better than Red Ribbon Asset Management, which has placed the subcontinent at the heart of its investment strategies since the company was founded more than a decade ago. Drawing on unrivalled knowledge of local markets with an expert team of more than a hundred advisers working in India’s economic hotspots, Red Ribbon offers unique opportunities to share in the potential of this, the fastest-growing large economy on the planet.

                                                                     View our investment products

 Overview

As a proud Indian living in London I am delighted by the technological achievements India has made over the last few years, and landing a craft on the moon within the next month will make me prouder still. When I was young and growing up in India none of that seemed possible, and now we have a craft in orbit around Mars!

But the steady process of day to day innovation and development is important too, and it’s difficult to underestimate the sustained work Prime Minister Modi and his predecessor have both put into making India a Global Technology Hub: day by day and step by step, they have inexorably helped move the country towards a new, technology-based economy that is infinitely better suited for the new millennium.

It’s nice to see that those efforts too have now been recognised.

Eco Hotels to list in London Stock Exchange

By Archive No Comments

Gavin Brooking from Eco Hotels tells Proactive London’s Andrew Scott they’re aiming to be the world’s first carbon neutral hotel brand of its kind.

Brooking says they’ve had a prototype operating successfully for a number of years now and are making final preparations to roll out across India where he says the market is growing massively with people looking for quality accommodation.

The Subcontinent’s Soft Growth Revolution…More Water and less Smoke

By Archive, India, News No Comments

Think Economic Growth and most of us conjure up images of thundering Turbines and Power Stations belching out smoke, but Growth comes softly too: and nowhere is that better illustrated than India’s Tourism Sector, which this year contributed more than 9% to GDP and created 42 Million jobs across the subcontinent (8.1% of the total workforce). And that’s not all: Indian Tourism is projected to grow by more than 6.9% annually over the next decade, with more than 13 Million visitors last year and a projected turnover of $800 Million in 2019. It may not conjure up such graphic images, but Soft Growth can be just as lucrative and long lasting as its smoke belching cousin. Even so, and with economic expansion on this scale, Soft Growth can also come with a hefty price tag.

Take Tamil Nadu for instance, where an estimated 8000 hotels of various sizes and qualities between them require a minimum of 150,000 litres of water a day to stay in business, mostly doled out each day by privately operated water trucks ponderously circulating the area. But water, of course, is one of India’s most precious commodities and it became even more precious in Tamil Nadu last month when a severe drought imposed potentially catastrophic stresses on Chennai’s hospitality sector. All those water trucks have suddenly become scarcer (and more expensive) downtown and almost non-existent in the City’s suburbs.

The CMD of Empee Hotels, MP Purushothaman, put the case for economic survival with characteristic bluntness: “Hotels are managing somehow but only by paying more than double for water. It will be difficult to continue much longer if the dry spell continues”. And Empee Hotels is certainly not a peripheral player: it owns the Hilton Hotel in Chennai. If they’re struggling, others will be struggling too.

Restaurants in Tamil Nadu had started to use banana leaves rather than plates to save water: but even the leaves are now in short supply because of water shortages.

Faced with localised events of this extremity, we can’t help but recognise just how valuable and precious our natural resources can be. Eight thousand hotels sucking up water like a sponge can be just as damaging as a power station belching carbon dioxide into the atmosphere. And that’s why hotel groups with more robust and long term business plans are now looking to operate from much leaner resource platforms: hotels like Eco Hotels and Lemon Tree Hotels, with their innovative low burn models are not only greener and more environmentally friendly, but Green Hotels mean lower operating costs and bottom line liabilities too, plus a higher return on investment than their resource hungry counterparts.

And that, in a nutshell, is why Green Hotels are more popular than ever before on the subcontinent and look set to become an integral part of the Soft Growth Revolution.

Bad news for all those water trucks…

Red Ribbon is the founder of Eco Hotels, the world’s first carbon neutral hotel brand which offers “green hospitality” as part of a progressive roll out across India designed to take advantage of current market opportunities on the subcontinent. The brand meets all key sustainability criteria without compromising on either quality or standards of hospitality and is designed to cater for commercial and recreational travellers alike.

Executive Overview

Nobody can now seriously doubt the future economic importance of Soft Growth on the Subcontinent, and India’s Tourism and Hospitality Sector is a striking example of the phenomenon. Currently contributing nearly 10% of GDP Growth annually, Tourism and Hospitality deserve just as much attention as the most imposing infrastructure projects. That’s why Green Credentials are so important.

As an integral part of any serious and sustainable long term economic planning we can no longer afford to ignore the impact of Soft Growth on the environment, any more than we can ignore its Hard variant: India’s precious water supplies are just as important to our shared future as our clean air.

To deliver properly on these imperatives, hotels across the world now have to be constructed with eco compliance built into their DNA, part of the original design and central to the whole project from the ground up. Only in this way will cost savings and sustainability come together properly and deliver the range of benefits mentioned in the article.

I’m proud that Eco Hotels have done just that from the very beginning and proud too of the part Red Ribbon has played in developing the project and its ambitions over the last decade or so, spearheading an environmentally friendly response that also makes good business sense for our investors.

Safe as Houses: It’s the fundamentals that matter and India has got them right

Safe as Houses: It’s the fundamentals that matter and India has got them right

By Archive, India, News No Comments

Safe as Houses? Not quite. Even without the market shredding impact of America’s Sub Prime crisis of the last decade, house prices had fallen in the United Kingdom by 18% between 1989 and 1995 (in London the fall was closer to 37%), and in Japan prices fell by more than 60% between 1990 and 2000: between 1987 and 2007, the S&P Index in the States rose by more than 500%, compared with a 200% growth in US real estate. And of course, the seemingly overwhelming case for equities over bricks and mortar during this turbulent twenty-year period wasn’t hard to explain. The United States, in common with most western economies, was riding high(ish) on a tide of acronyms, CDOs and CDSs, not to mention the sliced and diced (and dodgy) mortgage portfolios taken to market with a guaranteed AAA rating.

The lesson for Real Estate markets across the globe is, equally obviously, straightforward: look beyond the froth and examine the fundamentals…examine them closely and examine them carefully.

So when it comes to India, and despite some low voltage gloom earlier this year in the run up to the elections, the fundamentals of the Real Estate Market couldn’t be looking better. Even India’s acronyms are more encouraging: RERA and GST represent massively significant policy initiatives from the Modi Government that have, if anything, strengthened the sector’s fundamentals. But most of all, demand for real estate on the subcontinent is running at a high because it reflects the economic realities of the fastest growing large economy in the world, with a burgeoning and increasingly urbanised population looking for affordable (and, for some, not so affordable) homes among India’s rapidly expanding conurbations.

And that’s not froth…it’s hard, crystalline fact.

In New Delhi last week, the City’s Development Authority (DDA), received more than 50,000 applications for funding under its Housing Scheme, with some Rs 570 Crore, or nearly $82 Million, having been collected by sponsoring banks (it seems it would have been more but for a certain bureaucratic ineptness among the banks involved, which is also something of a global phenomenon over recent years).

The DDA will shortly draw lots to select those applicants who are lucky enough to be allocated flats, but the number of properties on offer is barely a third of the overall subscription (17,922) and that is a striking testament to the continuing strength of the market at large: after all, in a parallel world, any IPO that was three times oversubscribed would see an immediate jump in the underlying share value. In New Delhi today, we are witnessing an unmistakable bellwether for future real estate growth.

Then, of course, there is that other important acronym to consider, NRI: the Non Resident Indian.

Historically Indian Real Estate had been at the top of the wish list of most NRIs looking to invest in the subcontinent, but delays in construction (not to mention a few high profile, fly by night developers) had dampened this demand significantly.

But that all changed with RERA (the Real Estate (Regulation and Development) Act 2016): key legislation which gave enhanced protection for those purchasing properties under construction, with the result that more and more NRIs (as well as, of course, domestic buyers), have steadily moved back into Indian Real Estate. So too, GST (the ground breaking new Goods and Services Tax) reduced the tax payable on newly constructed properties from 12% to 5% (1% for those covered by the Affordable Housing Programme) and Investors haven’t been slow to see the opportunities.

Added to all that, a stronger Dollar has also turbo charged levels of NRI interest, with Housing and Makaan.com reporting an increase from 30% to 40% in NRI leads last year, and those NRIs based in the UK, US, UAE and Singapore between them now account for 55% of real estate purchases in India.

Yet another bellwether for future growth: more real world facts that make for more attractive fundamentals (and with only three acronyms in sight).

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, setting out to meet the challenges posed by India’s urban housing shortages in a practical and dynamic manner. The company is at the heart of a project established by Red Ribbon to harness the potential of India’s real estate markets and deliver added opportunities for investors. Because, when it comes to investing on the subcontinent, nobody knows India and its markets better than Red Ribbon.

 

Executive Overview

I for one have never found it surprising that with such an increasingly mobile, increasingly affluent and rapidly expanding population, India is creating one of the most buoyant real estate markets in the world: almost by definition, a mobile and much more urbanised population will difficult to keep still.

And that, in essence, is what I think makes the subcontinent’s property markets so different from their Western counterparts: the fundamentals of demand are not artificially created at the desk of an investment banker in Manhattan, they are real people looking in ever increasing numbers for real (and affordable) homes.

That’s why Red Ribbon has been committed to Modulex Construction from the very beginning of the project, and why we remain committed to the project today. I’m convinced its innovative technologies are a vital answer to the challenges created by these extraordinary markets: a practical and cost effective solution for the extraordinary times we live in.

Why Donald Trump’s Twitters mean more Infrastructure Investment in India…and soon

Why Donald Trump’s Twitters mean more Infrastructure Investment in India…and soon

By Archive, India, News No Comments

There’s a good reason why global financial markets responded so positively to last month’s landslide BJP win in India, and it’s called Donald Trump: the President’s announcement of a 25% tariff on steel imports last year, with 10% on aluminium and an increasingly bitter trade war with China has sparked a worldwide economic slowdown. Mr Trump might think “trade wars are good and easy to win”, but he’s in a small minority because most of the engaged world dislikes nakedly protectionist policies for good reason: because they’re bad for global trade and worse for market stability.

Which brings to the new Modi Administration. Financial Markets have responded positively to BJP’s return to Government on the subcontinent precisely because of the lengthy period of stability it heralds in an increasingly unstable world (take note Theresa May), added to which, unlike Donald Trump, Mr Modi has already earned his economic spurs through a series of groundbreaking market reforms that have improved India’s global economic standing: rising from tenth in the world to third in just four years on Cebr rankings. And the financial markets aren’t slow to catch on either: since January of this year, the Bombay Stock Exchange Sensex Index has risen by 7%.

But there’s a snag, in this sea of global turbulence India’s very stability and growth means more that than ever before the subcontinent needs to fuel its domestic markets to become less dependant on imports.

It’s not a lesson lost on Modi.

The BJP Manifesto for this year’s election included spending pledges of $ 1.4 Trillion to fund infrastructure projects over the next five years with the clear intention of building (domestically) on its economic growth and turning India into a global manufacturing hub. Infrastructure projects are the turbo charger of any advanced modern economy, and the Modi Government has already borrowed 4.4 Trillion Rupees ($ 63 Billion) since January to continue them at a faster rate than ever before.

And it’s not as though it can’t afford to do it either…India’s debt to GDP ratio is the lowest of all major global economies, running at at 67% compared with China’s astonishing 253%: so if all this looks overly ambitious, bear in mind that in the single year 2018/19 the subcontinent’s overall public sector expenditure was $352 Billion (more than five times the BJP Manifesto pledge) and it all means greater future public involvement in long-term infrastructure investment, which is good for India’s burgeoning real estate sector, good for the subcontinent’s economic prospects and, with a certain sense of irony, good for the global economy too.

Eat your heart out Donald Trump.

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company, working to meet the challenges of India’s rapidly burgeoning real estate and infrastructure markets, delivering exciting opportunities for investors through the platform of its Red Ribbon’s Real Estate Fund. Because, when it comes to investing on the subcontinent, nobody knows India and its markets better than Red Ribbon.

Executive Overview

The exponential growth in India’s real estate sector over recent years, linked to an unprecedented growth in the subcontinent’s population and increased urbanisation, provides a powerhouse for future growth within the economy and, in conjunction with increased infrastructure spending over the next five years, that looks likely to take India’s economy to new heights. Not before time too: as the article points out, there is a pressing need for India to drive domestic growth further so as to insulate itself from increasingly turbulent international markets.

That’s why Red Ribbon has committed itself to supporting real estate investment on the subcontinent through its Real Estate Fund, established not only to meet the challenges of its markets but also to give our investors the best of the opportunities they have to offer.

Setting up the Sandbox…India’s Blockchain Technologies take a leap forward

Setting up the Sandbox…India’s Blockchain Technologies take a leap forward

By Archive, India, News No Comments

The Reserve Bank of India (“RBI”) might still be hedging its bets on Cryptocurrencies (more of which in a moment), but it has more or less given up trying to stop the inexorable rise of Blockchain, and given the technologies involved have never recognised national boundaries, that means imminent de facto regulation of Blockchain not only in the subcontinent’s own financial backyard but in financial markets everywhere. And it’s a smart move too: with no other major regulator showing the slightest willingness to step up to the plate, RBI’s decision to pave the way to full Blockchain regulation will almost inevitably lead to it becoming a lead regulator for Blockchain worldwide.

Which is a good place to be, because Blockchain technologies are set to radically change the way we all do business, the way we buy things and how we deal across boundaries in increasingly globalised markets, all of which demands an innovative regulator with the oversight skils to steward the complex processes involved.

And, at last, we have one.

RBI’s Framework Report was issued on 18th April and announced that a Regulatory Sandbox will be set up, a common regulatory tool that enables innovators, financial service providers and regulators to work together with a small number of consumers over a short(ish) period, conducting field tests and collecting evidence as a basis for future formal regulation. Or, in other words, as the RBI’s bloodless boffins put it: “a structured avenue for the regulator to engage with the ecosystem and to develop innovation-enabling or innovation-responsive regulations that facilitate delivery of relevant, low-cost financial products”. Talk about sucking the excitement out of a project…

But don’t let the geeky language get us down, let us instead unite in praise of the Sandbox because it gives Blockchain a lead into the fastest growing large economy on the planet as well as some of the world’s most innovative and exciting markets. With those factors in play, just imagine what India and Blockchain might do together. And according to the RBI’s Report these flesh and blood consumer trials will be completed within a mere six months, so in theory we can look forward to a Blockchain Christmas. What could be more exciting than that?

Interestingly the Reserve Bank has also given us a glimpse of the specific new technologies that will be tested in the Sandbox: mobile device payments, digital identity software, data analytics, AI and machine learning applications: all of which are certain to make the hearts of bankers and on-line retailers skip a little faster; as will the “eligible sectors” of the programme, which include well know finance friends such as retail payments (obviously), money transfer platforms, KYC checks (hurrah) and a limited number of cybersecurity products (admittedly not so exciting).

And for those of you who are now starting to re-read that list again, don’t bother: Cryptocurrencies aren’t in it (yet). At least as far as India is concerned, the non-fiat end of the currency spectrum is still struggling to get out from under the Finance Minister’s Budget Statement from 1st. February last year. But even so, industry pressure groups are already stepping up their lobbying for Crypto’s exclusion from the Sandbox to be removed. Take Nasscom for example (which represents Indian IT companies, so its voice certainly counts), which has called for a regulatory re-think, arguing (correctly) that “…cryptocurrencies are an important part of Blockchain technologies and their exclusion will inhibit testing for technologies already approved for use in the Sandbox”. And the Payments Council of India has also weighed into the debate: arguing that the exclusion of non-fiat currencies is likely to be a major fetter on innovation. Those are pretty powerful arguments, coming from highly influential bodies and they’re certainly not alone. For one, the Supreme Court has now re-listed the Cryptocurrency appeal for the second week of July (to give RBI time to come forward with a new regime rather than have its 2018 policy declared unlawful), so don’t bet against another U Turn from Mint Street in the not too distant future.

North Block Capital Fund I is an open-ended regulated fund listed on the Gibraltar Stock Exchange specialising in crypto assets and blockchain related technology.

Executive Overview

Like most of us, I suppose, I listened with interests to the comments made last year by India’s Finance Minister as part of the Union Budget Debate, which not only caused the value of Bitcoin to soar on international exchanges, but also precipitated the Reserve Bank (as Monetary Regulator on the subcontinent) to issue what now seems to have been a singularly ill advised policy attempting to strangle these new technologies at birth. These policies have since been subject to formal challenge in the Supreme Court of India and, as we have commented on this site before, the resulting litigation has inexorably driven the Regulator to back away from its original position.

This latest announcement of the Sandbox initiative, and likely introduction of cryptocurrencies into the process is all part of that process of re-evaluation and I believe it is to be warmly welcomed.

Because it is now beyond question that Blockchain has the potential to fundamentally change the way we all do business, which is why I’m so proud that the North Block Capital Fund will play a part in that process. India is now squarely at the forefront of major regulatory and technological change, and I want our investors to be able to share in the exciting opportunities this offers.

Anyone for Brexit?…Why India and Commonwealth won’t be coming to the rescue.

Anyone for Brexit?…Why India and Commonwealth won’t be coming to the rescue.

By Archive, India, News No Comments

It’s a big IF, but if the United Kingdom manages to leave the European Union on 31 October, it will at least have managed to sign a clutch of Free Trade Agreements (“FTAs”) with some of the world’s economic leviathans: including the Faroe Islands, Liechtenstein and Chile. What? Not leviathans you say…well, what about our other FTA with the CARIFORUM Trade Block. The what? The CARIFORUM Trade Block…an economic collective of Barbados, Saint Lucia and the Dominican Republic, amongst others. So, if we’re ever in need of cod, false teeth, rum and molasses, things couldn’t be looking better.

But what if (that word again, “if” is now a Brexit institution), what if our ambitions run ahead of false teeth and towards some of the more substantial economies across the world?

After all, Liam Fox told us in 2017 that a Trade Deal with the European Union would be, don’t laugh, “the easiest in human history”; albeit earlier this year in an interview with the Financial Times he groaned his trade deals were getting harder to complete because nobody thinks the United Kingdom Government can handle Brexit. Who would have thought it? And Boris Johnson thought FTA negotiations would be a piece of cake (cake you can also eat). Although, on second thoughts isn’t this the same Boris Johnson who flew to Afghanistan to avoid having to vote on the third runway at Heathrow (having said he would lie in front of the bulldozers) and called Africans “flag waving piccaninnies with watermelon smiles”. Perhaps, it might be better after all if our prospective Prime Minister keeps his appointment in Southwark Crown Court rather than fly over to negotiate a Trade Deal with Ghana.

But what about India, the jewel in the crown of the former Empire: surely we can cut a Trade deal with India?

Don’t count on it.

The former Indian High Commissioner in London, Yashvardhan Sinha, dampened expectations on that front when he pointed out that the Fox Johnson axis of aspiration was nothing more than “pre-independence nostalgia” and who can blame him, given the United Kingdom is far from being amongst India’s front rank trading partners: exporting £3.7 Billion to India in goods and services last year in contrast to the £82 Billion exported by the European Union (the EU makes up 13% of India’s import trade).

Indeed, somewhat controversially, the High Commissioner may have put his finger on something more significant. Pre-Independence nostalgia weighs little against the hard economic fact that more than 44% of UK goods are exported to the EU, as opposed to 9% exported to the rest of the Commonwealth put together. And that progressive decline in the former mother country’s trade with its former colonies has been going on since 1950 with the strengthening of European economies in the aftermath of the second world war, a trend which has only been entrenched by the growth of the very EU’s Institutions Mr Fox and Mr Johnson seem to dislike. An added irony is that the trend was accelerated further by GATT, with its added Tarrifs for Commonwealth Countries: Tarrifs that are now overseen by the WTO (icon of the pro Brexit ERG Group).

And even with its far more significant (in contrast with the UK) trading platform, even the EU has had difficulties negotiating an FTA with India. Talks broke down in 2013 on the (hardly insignificant) issues of market access and tariff reductions, only to “resume” again last year to produce the EU – India Strategic Partnership, which did precisely nothing to address any of the issues that caused the talks to stall in the first place. So don’t hold your breath on that front either.

Bearing in mind that the UK has been part of the EU delegation negotiating with India, can it really hope in some schizophrenic leap of faith now to step into the gap left by its own failures?

India might think otherwise.

And in truth, the former Mother Country’s world has been turned upside down. India is now the fastest growing large economy on the planet with annual GDP growth of 7.3%, and is on track to have the largest, most avaricious consumer population in the world by 2022. The UK grew at less than 0.6% this year and has a population smaller than Thailand. Just where’s the soft power in that?

Brexit anyone?

Nobody understands the fundamentals of the Indian economy better than Red Ribbon Asset Management, which has placed the subcontinent at the heart of its investment strategies since the company was founded more than a decade ago. Drawing on an unrivalled knowledge of local markets with an expert team of more than a hundred advisers working in India’s economic hotspots, the Red Ribbon Indian Equities Fund offers unique opportunities to share in the potential of this, the fastest growing large economy on the planet.

Executive Overview

I’m always surprised to listen to leading UK Politicians advocating the apparent ease of completing a Free Trade Agreement in a matter of months, not least with major economic powers like India: more surprised still when they speak about the strong ties of Commonwealth putting the United Kingdom in some way at the head of the queue. I’m proud of the links between our two countries, but I don’t think they do anything of the kind and comments from former High Commissioner in London reinforce my reservations.

As the Article says, the world has come a long way since Independence, and I doubt that India will be coming to the United Kingdom’s economic rescue anytime soon if (and its a big “if” as the article also says) Brexit is brought to a conclusion. India is now one of the world’s economic superpowers and it would be as well to start recognising that fact.

I know our two countries will continue to trade together and thrive together, but they will do so in the real world; not a world unduly coloured by pre-independence nostalgia.

 

 

Less Means Too Much: the Sustainability Paradox and India’s Eco Hotel Sector

Less Means Too Much: the Sustainability Paradox and India’s Eco Hotel Sector

By Archive, India, News No Comments

Neil Armstrong will be remembered for his small step, Theresa May for her Brexit stumbles and Boris Johnson for his …well, we’ll have to wait and see about that. But we already know how William Stanley Jevons will be remembered, because we can see the impact of the Jevons Paradox every day, in almost everything we do. With its roots in careful observations drawn from early nineteenth century coal markets (bear with me, I’m not making this up), Jevons discovered that the truism that as technologies become more efficient, they will inevitably consume more resources. So, efficient steam engines will not reduce the demand for coal, they will more and more coal up…and that’s the Jevons Paradox.

So what’s all this got to do with Eco Hotels in India? Well, let’s fast forward from the age of steam, leave ringworm epidemics behind and look more closely at our contemporary climate change policies.

With the exception of the current occupant of 1600 Pennsylvania Avenue and a motley collection of loose jawed climate change deniers, we are all concerned about reducing global carbon emissions and improving energy consumption, and at least superficially one way to do this to make our energy production technologies more efficient. Switching to wind powered technologies rather than burning coal is surely a step in the right direction. Unlike coal, the wind is free at the point of delivery: coal on the other hand has to be dug out of the ground, shipped from there to here and expensively burned up before it can belch carbon deposits into the atmosphere.

But in fact the reverse is the case: by switching to more wind powered technology we are more likely in the long term to increase global energy consumption and diminish sustainability levels.

That’s because the Jevons Paradox tells us that the more wind powered energy we produce (that is, more cheaper energy), the more we will inevitably increase global energy demands. Simply making the output cheaper than conventional production methods means more and more energy outputs will be required in the long term. We cannot hope to promote sustainability simply by focusing on output costs and operational efficiencies.

All of which brings us (at last you might think) to Eco Tourism in India, where consumer demand levels are running at an all time high and business and recreational travellers alike rating environmental sustainability at the top of their criteria for choosing a hotel.

That’s why the Hilton Hotel Group has announced a sustainability vision for 2030 based on locally sourcing less energy hungry products and services, such as soap and laundry supplies. The rationale for the new policy is that cheaper soap, towels and bedding will lead inevitably to more efficient operations and better environmental ratings. But just think about that for a moment: think about it in particular from the perspective of your average cost conscious hotel manager in Mumbai (which means pretty much all of them). Suppose he (or she) has been used to spending Rs 5000 a day on soap for their guests, shipped in by Unilever; but now, under the new Hilton policy, they will spend only Rs 1000 a day buying their soap locally. Ask yourself, under the new regime, are they likely to care more or less about how much soap their guests use? Will she (or he) worry as much about the number of towels being sent to the laundry if the laundry bill is now a quarter of what it used to be.

Exactly. That’s the Jevons Paradox: the very act intended to make operations more efficient has caused the hotel to become more energy hungry and less sustainable.

But there’s a positive flip side. Take a look now at the much more successful Eco Hotel brands on the subcontinent, brands such as Lemon Tree Hotels and Eco Hotels which are responding to the same burgeoning consumer demand by doing more than just toy with their supply costs, soap and towels. Unlike the Hilton’s model, these groups have had “green credentials” built into their corporate DNA from the very beginning of the construction process. Water saving devices are added at the outset to inhibit excess usage (not just make water cheaper to supply); solar devices are installed that will reflect light across the entire hotel environment irrespective of an individual guest’s decision to turn the lights off when they go out; and communal kitchens are built to make shared usage an inescapable fact of occupancy rather than just a lifestyle choice. These are precisely the kind of structural, systemic changes that are likely to entrench environmental efficiencies into India’s hospitality sector and we are seeing the change happen first, in the mid range eco market. Where Lemon Tree and Eco Hotels lead, others are likely to follow.

Eco Hotels, the world’s first carbon neutral hotel brand of its kind offers green hospitality as an essential component of its progressive roll out across India, designed specifically to take advantage of current market opportunities on the subcontinent. The brand meets all key sustainability criteria without compromising on quality or standards and is designed to cater for commercial and recreational travellers alike.

Executive Overview

India’s boom in tourism levels is playing a significant part in driving the subcontinent’s hotel and hospitality sector to unprecedented levels of growth and, as the article says eco credentials are playing a bigger and bigger part in determining where this tide of travellers are deciding to stay. Key surveys have confirm that so called “green credentials” are high up on the scale of priorities they will take into consideration when making their choice.

And as the article also says, tinkering with purely superficial aspects of eco compliance, counting the soap and laundering hotel bedding more cheaply, not only does little to meet these exacting consumer demands, but actually makes it more likely that the business itself will be less sustainable in the future. That’s why at Red Ribbon, when we founded the Eco Hotel project, it was important to us to build sustainability into the initial construction process and to hard wire it into the operation of our hotels.

I’m proud that Eco Hotels has done just that and proud too of the part Red Ribbon has played in developing the brand and its ambitions in the years since, spearheading an innovate and environmentally friendly response to India’ resurgent tourism demands.

Who is J Christopher Giancarlo anyway, and why is India the future of Blockchain?

Who is J Christopher Giancarlo anyway, and why is India the future of Blockchain?

By Archive, India, News No Comments

Just when we were waiting for Theresa May to leave Downing Street and Donald Trump to come to Regents Park, J. Christopher Giancarlo has pulled stumps without fanfare or ceremony and left altogether, he just went. But who is this fellow and why should we be interested in him anyway? Well, taking those questions in order: he is (or rather was) the Chairman of the US Commodity Futures Trading Commission (“UFTC”), and we should be interested in him because he’s only been regulating our crypto and Blockchain markets for the last two and a half years.

This is the man who describes himself as being humbled at being called “Crypto Dad”; a regular chap who grew up amongst the exotic complexities of Blockchain, and a self-confessed “quantitative regulator” with an “exponential growth mindset” (whatever those might mean).

But the fact remains that although this Bitcoin ubermensch made it his mantra in office to  “embrace market based solutions” in a period of digital revolution, he ultimately turned out to be a reactionary: the Flight Control Jeremiah with a divine mission to tell anyone who will listen that landing on the moon is impossible. In 2017 he told us (without a smile on his face) that fiat currencies and ICOs were too complicated for your average Joe, that they should be discouraged and it might be better to stick with paper stock and assets you can photocopy. So much for embracing our digital times…

But, as someone once said (Margaret Thatcher actually), you can’t buck the market and as e watch J. Christopher Giancarlo retreat from the world stage to spend more time with his money, the markets are already finding a new home where Blockchain can spread its wings and rise to its full potential: half a world away, in India.

 In particular, the Reserve Bank of India now seems to be regretting its hasty decision to ride on Mr Giancarlo’s coat tails last year, by issuing a directive effectively banning crypto banking activities on the subcontinent. Counter intuitively, and as is often the way with that sort of precipitate, ill thought out action, the RBI Directive has actually signalled something of a renaissance in Blockchain technologies in India, stepping up to occupy the yawning regulatory gap left by the UFTC.

It did this first through an explosion in exchange escrowed peer-to-peer services, designed to allow cyber markets to thrive with little or no regulation. And secondly, because a lack of regulation is inherently a bad thing (ask Carillion), court proceedings were issued by the Internet and Mobile Association of India (hardly surprising given it is the fastest growing mobile and internet market in the world): the proceedings sought to overturn the Reserve Bank’s 2018 decision on the basis it was unlawful (commercial myopia not being a legal basis of challenge). And significantly, these proceedings have now reached the Supreme Court of India.

 The Supreme Court last month heard submissions in the action on behalf of the Reserve Bank that its Committee, tasked with overseeing regulation of crypto markets, had reached “…the final stages of its deliberations, and these proceedings should be delayed until after its report is produced”. In other words, and in plain English: Dear Judges, delay your ruling because we and the Government are going to give in. Crypto markets, Bitcoin and Blockchain are about to step into the daylight on a new Indian stage after being consigned to the gloom by Mr Giancarlo.

The Court didn’t need telling twice: it quickly granted the Reserve Bank a four-week adjournment to allow an “opportunity for the Government to do the needful”.

And this, in short, is how international markets actually work. One leading regulator declines to accept the challenge posed by a new sector, so another steps forward to take its place. The United States gives way to India, because markets abhor a vacuum. And having called it so badly, last year it is greatly to the Reserve Bank and the Government’s credit that they have now shown themselves ready to take on the challenge. They are certainly unlikely to meet any lack of appetite for Crypto markets amongst its fellow citizens or across the wider commercial world. The torch has been passed to a new generation of regulators….as someone else might once have (almost) said.

Nobody understands the fundamentals of the Indian economy better than Red Ribbon Asset Management, which has placed the subcontinent at the heart of its investment strategies since the company was founded more than a decade ago. Drawing on an unrivalled knowledge of local markets with an expert team of more than a hundred advisers working in India’s economic hotspots, the Red Ribbon Private Equity Fund offers unique opportunities to share in the potential of this, the fastest growing large economy on the planet.

 

Executive Overview

I remember being surprised when I read the comments made by India’s Finance Minister in the Union Budget Debate last year, comments which caused the value of Bitcoin to soar on international exchanges and which seem directly to have precipitated the Reserve Bank’s intervention as described in the article. I remember too thinking that whatever the merits of Bitcoin and Blockchain might be, this was at least a powerful statement of the role that India might play in any future Blockchain driven market.

And now we seem to have come full circle.

The comments made in the Supreme Court on behalf of the Reserve Bank of India (and, at least by implication, on behalf of the Government as well) clearly signal a willingness to step into the regulatory void left by the United States and meet the challenges and opportunities posed by Blockchain on a concerted basis. And in a sector so obviously in need of regulation and so obviously lacking in effective oversight to date, that has to be a good thing.

So watch this space, it should get interesting!

It’s Modi by a Mile…and here’s why it matters.

It’s Modi by a Mile…and here’s why it matters.

By Archive, India, News No Comments

If you felt tremors under your feet this week, it’s because we’ve just witnessed the biggest expression of democracy in history: with some 800,000,000 Indian citizens, 67% of its population, taking part in the subcontinent’s elections and, perhaps equally significantly, more women than ever before turning out to have their say on who will take the subcontinent forward. Everything about the process was monumental, including the sheer scale of abuse and bile freely heaped on one another by both main parties. Nardendra Modi called the assassinated Rajiv Ghandi (fresh faced Rahul’s dad) the “number one corrupt man in the country” and Rahul was probably stung too by the accusation that his family used an Indian Navy Aircraft Carrier as a glorified taxi to take them on holiday. To be fair, Rahul tried to get his revenge in first: accusing Modi of fraudulent involvement in the controversial Rafale Jet affair, but that backfired when he was forced to apologise for (inadvertently) suggesting the Supreme Court had agreed with him (when it didn’t).

And of the 2,800 odd candidates who stood for either of the main parties, an astonishing 464 (a little under one in five or 20%) had criminal records: indeed, the Congress Party ran 40 candidates who were facing current criminal charges including rape, murder and attempted murder: only narrowly beating the BJP tally of 38. These aren’t necessarily the sort of people you would want to bump into after dark in a Mumbai alley.

Small wonder then, that with admirable prescience the BJP Party cautioned its opponents on Wednesday to accept “defeat with grace”, prompting Congress to make one last allegation of voter fraud to keep the pot boiling.

They needn’t have bothered…It was Modi by a Mile.

And after all the dust has settled; after all the recriminations, allegations and abuse has been hurled, something rather splendid has happened too: the world’s largest democracy, and one of the world’s most diverse and richly textured countries, has just overseen a peaceful transfer of power. And it doesn’t matter a jot that this power has been given back to the person who gave it up: not when you consider the electoral records of neighbouring Pakistan and Myanmar across the Bay it doesn’t. In truth this was a democratic triumph for the 800,000,000 Indian citizens who stood for hours in the blazing sun from Utter Pradesh to Kerala to have their voices heard, and we should celebrate it as such.

Its certainly going to take more than a few unwholesome rogues in a dark alley, harbouring a grudge to diminish the scale of the triumph.

But this election, and its emphatic result in particular, matter much more even than that: because the policies of Nardendra Modi’s last administration were largely responsible for transforming India’s economy since 2014.

And yes, economic change was certainly in the air on the subcontinent before 2014, but it’s been turbo charged ever since. Think of the milestone economic events that have emerged in those few short years: Demonetisation, Inflation now running at less than 4%, GST Reforms (creating a genuine prospect of whole India trade), a revamped Insolvency Code, the Jan Dhan Yojana Rural Program, the Affordable Housing Program (now back on target after years of stagnation) and four times more new highway miles built in a single year on the subcontinent than have ever been built in Ireland and the United Kingdom put together.

India’s GDP growth rate is still amongst the highest in the world (among major economies) and it will be the fastest growing large economy in the world for at least the next two years according to the IMF, projected to grow annually at 7.3%. Compare that with Brexit bound Britain where the equivalent figure is 0.6%, the United States’ at 3.2% and even China, which is running at 6.9%.

As the old joke about the three legged pig goes, you don’t eat it all at once and when things are going this well for India, it’s unsurprising so many of its citizens have decided to hang on to what you’ve got. That, in short, is why it was Modi by a mile…and that’s why it all matters so much.

Nobody understands the fundamentals of the Indian economy better than Red Ribbon Asset Management, which has placed the subcontinent at the heart of its investment strategies since the company was founded more than a decade ago. Drawing on an unrivalled knowledge of local markets with an expert team of more than a hundred advisers working in India’s economic hotspots, the Red Ribbon Private Equity Fund offers unique opportunities to share in the potential of this, the fastest growing large economy on the planet.

Executive Overview

As an Indian National, I’m proud of the manner in which the subcontinent’s elections have been conducted and as someone doing regularly business on the subcontinent, I’m pleased at their outcome too.

It is no small matter of local administration for a country where more than 900,000,000 of its citizens are eligible to vote to shepherd the mammoth process so smoothly over a polling period of more than a month. No small matter too, lest we forget, that the entire process was conducted peacefully despite the usual rough and tumble between candidates, which has come to charecterise politics in India. As somebody once said, there aren’t any fleas on a dead dog.

And as the article points out, we should never take a peaceful transition of power for granted: especially in view of the events over recent years in Pakistan and Myanmar.

And as a businessman too, who has been investing in India for more than a decade through Red Ribbon platforms, I am pleased that Prime Minister Modi has been re-elected because BJP economic policies have been the foundation of the unprecedented economic success the subcontinent is enjoying today. I want that success to continue, and with Narendra Modi at the helm I’m confident India’s economy is now back in safe hands…

Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

Newsletter