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Beating a path to its door: the Growth of India’s International Markets

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David Ricardo, the father of British Economics, wrote in 1817 that it was impossible for capital to be invested abroad. Herbert Spencer begged to differ forty years later:  “Look at the European continent. All European capitals have light because a British gas company provides them with gas…you say that the Germans are far ahead of Great Britain. But look at Germany. Even Berlin, the capital of the German Reich, would be in the dark if a British gas company had not invaded the country and lighted the streets.” David Davies might take a note of that when he sits down with Michel Barnier again next month.

But of course, times have changed since David Ricardo. The great economist was right about so much, but he was fundamentally wrong about international markets and today’s world marches to the beat of a very different drum. Overseas investment matters enormously, adding to the vitality and vibrancy of any economy, which is why Japanese Prime Minister Abe’s visit to India last month was so important (sandwiched in just before his surprise re-election campaign). For the past decade and a half, Japanese investment has played a hugely significant part in shaping India’s economic success story: more than $25 Billion has been invested into the subcontinent by Japanese Corporations in the last seven years alone. Japan is also the third largest external investor in India, projected to spend $35 Billion over the next three years, in addition to which its Government has tasked the Mizuho Financial Group with seeking out new investment opportunities with the object of reinvigorating future spending programmes.

The relationship is that important to both countries.

Abe met Prime Minister Modi on his trip last month and laid the foundation stone for the new Mumbai to Ahmedabad Bullet Train which comes hard on the heels of works commencing on Phase 1 of the Delhi Metro System (also involving huge Japanese investment) and that in turn followed the huge Delhi-Mumbai Industrial Corridor Project which began more than a decade ago: all of them underscoring the sheer scale of Japanese involvement in India’s infrastructure programmes.

And these are precisely the sort of outward looking initiatives that have come to characterise the Indian Government’s investment strategies over recent years, helping to turbocharge its economy through a succession of eye wateringly large infrastructure projects which have helped turn the subcontinent into the most significant Growth Market in the world with foreign exchange reserves rising to a giddy $400 Billion this year and inflation seemingly pegged at 2%. No wonder the world is beating a path to its door.

Since the company was founded more than a decade ago, Red Ribbon Asset Management has always placed India at the very heart of its investment strategies, at the very heart of its investment strategies which aim to deliver above market rate returns above market rate returns for its investors in one of the world’s most exciting markets.

Read about Mizuho Bank in India here

Read about the Mumbai to Ahmedabad Bullet Train Project here

 

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.

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