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Why India is still on track

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As Philip Hammond is about to find out, the end for any Chancellor of the Exchequer is rarely other than nasty, sharp and brutal. When Hugh Dalton was sacked for leaking budget information to the Standard (of all papers), Clement Attlee got rid of the grand old man of the party with a shrugged “not up to the job”. And when Norman Lamont went prematurely French while sterling crashed out of the ERM in 1992, he quickly found out that far from having “rien” to worry about he actually had plenty to “regrette”. He was out on his ear in days. So the lengthening shadow of Boris outside Downing Street is, indeed, plenty for Mr Hammond to worry about.

Of course politics on the subcontinent can be equally nasty and brutish and we saw some of that in this year’s election, but India’s Prime Minister hasn’t had a Chancellor of the Exchequer to kick out since 1947 (a certain Hugh Dalton as it happened, ironically enough) and nowadays Nardendra Modi doesn’t even have to drive to the Palace so think of the savings in petrol. In truth, India’s State Finance structures have changed beyond all recognition since the Raj retreated to Whitehall.

For a start, The Chancellor of the Exchequer is now the Finance Minister and he is now a she. The redoubtable Nirmala Sitharaman last week ditched the colonial red box in favour of a red “bahi-khati” or “ledger book”, which sounds a much more professional accessory for this very modern Minister, tasked with stewarding the finances of the world’s fastest growing large economy. The Chief Economic Adviser, Krishnamurthy Subramanian, went even further, claiming the new look ledger symbolises India’s “departure from the slavery of Western thought”.

And the first Union Budget of the new Modi Administration wasn’t short on radical departures either.

Looking to kick start a growth rate of 7% GDP that Philip Hammond would die for, the Finance Minister has introduced cuts in corporate tax rates, provided improved support for digital payment systems (that will make life easier for small businesses) and additional tax breaks for the Real Estate sector.

That last one, Real Estate, has of course become something of a totemic theme for Modi’s Government and there will now be a slew of new tax incentives as part of the Affordable Housing Programme: additional interest deductions on loan payments, stamp duty breaks, a realignment of the definition of “affordable housing” itself to conform with GST and income tax legislation and a new model Tenancy Law to encourage rentals. Conditions relating to tax exemptions for long-term capital gains on property have also been relaxed…and the list goes on…

So it’s obvious if only from the focus given to it in the Budget, that Prime Minister Modi’s Government will continue to pay close attention to the subcontinent’s real estate markets for the foreseeable future: given the exponential growth and increasing urbanisation of India’s population that’s certainly not a surprise, with these trends only likely to increase in significance over the coming years it’s hardly an area the Government can afford to ignore.

And unlike India’s last Chancellor of the Exchequer, Nirmala Sitharaman has shown on her first major public outing in the role that she’s certainly up to the job…

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, Red Ribbon offers unique opportunities to share in the potential of this, the fastest growing large economy on the planet.

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Executive Overview

I was pleased to read the terms of last week’s Union Budget that struck me as setting exactly the right tone for the new Administration: continuing where they left off before this year’s elections and with an added focus on critical areas like housing and real estate generally. I feel sure that with this drive and determination the new Modi Government will be more than capable of rising to meet the challenges and opportunities the subcontinent’s real estate sector has to offer.

Here at Red Ribbon we’ll certainly be keeping a close eye on what comes next…

From Cannonballs to E-Mails… The next leap forward is Blockchain

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Like a lot of tourists, Walter Raleigh brought cigarettes back from America but he came home too with a simple if quirky question: what’s the best way of stacking cannonballs in a crate, in flat sections or pyramid fashion? It puzzled the best minds of his day (and beyond), before the astronomer Johannes Kepler explained why it had to be the pyramid. And, believe it or not, we wouldn’t have e-mails today without his solution: the so-called Kepler Conjecture is the founding father of e-mail traffic and proof, if proof be needed, that science develops in odd and wonderful ways. Nobody today is surprised that radio waves are used to carry wireless Internet signals, and not just carry news read by some fellow in a dinner suit. But what did Marconi know about the Internet?

Which makes it all the odder that so many of us still treat Blockchain as synonymous with Bitcoin: true, they might have grown up together but in truth Blockchain and Bitcoin have about as much in common as cannonballs and e-mails, or WLAN and dinner suits come to that. When did you last see an IT technician in anything other than a tee shirt?

So take, by way of example, the latest Blockchain initiatives that are now being developed in India, now the technology’s spiritual and regulatory home.

The subcontinent’s Healthcare Sector has advanced plans to use Blockchain to prevent and detect counterfeit drug production, create new anti tampering capabilities during the manufacturing process as well as to introduce improved accountability and transparency in clinical testing. Market leaders in the sector are also bringing closer the very real prospect of patient generated data empowered by Blockchain: and not a Bitcoin in sight.

And in the Financial Sector YES Bank has launched the first ever Issue of Commercial Paper using a Blockchain platform (on behalf of Vendata, with a market value of $14.6 Million): as a result of technologies used on the Issue, subscribers will now benefit from reduced issuance and turnaround times, better record keeping, reduced operational risk and real time visibility of issue and redemption numbers. What’s not to like?

And again, not a Bitcoin in sight…

Blockchain’s virtually untrammelled potential is breathtaking: the co-founder of the Blockchain India Foundation, Manav Singhal, described it as the “future of technology itself” and who in the circumstances would be rash enough to disagree with him?

Certainly not the Indian Government, which has not only given the green light for a new regulatory regime designed to nurture Blockchain’s growth on the subcontinent (the so called Regulatory Sandbox which we covered on this site last month), but has also unveiled in last week’s Union Budget a vision for a $5 trillion economy built on digital technologies that have Blockchain at their heart.

The Budget puts its money where its mouth is too, with new digital payment structures, a dedicated online portal for processing (and approving) loans to medium and small enterprises and a reinvigorated focus on so-called “new age skills”, including the internet of things, big data and AI. Enigmatically, the Budget also included funding for a new electronic fundraising platform: a Social Stock Exchange that will nurture and list new “socially based” commercial enterprises.

Blockchain is a vital component in all of that, so in future let’s try to make a real distinction between the Cannonballs and the E-Mails, the bow ties and the WLAN: after all, as Kepler might nearly have said, the box is never any bigger than our collective imagination.

                                                                                                                                                                                                 

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North Block Capital Fund is an open ended fund which acts as a platform for investment in developing Blockchain technology ventures and ICOs: primarily in India where Red Ribbon Asset Management has more than a decade’s experience of advising on the dynamic changes in this, the fastest growing and most exciting large economy in the world.

Executive Overview

I firmly believe in the vast potential Blockchain has to change the way we all do business, so it was interesting to see the innovative uses Indian Healthcare is planning to make of these technologies by creating safer drug production methods and additional efficiencies within the sector. And of course, as someone who has grown up in the financial sector, I was also fascinated to hear news of the first ever Blockchain supported Issue of Commercial Paper, which I am sure will act as a further catalyst to speed up change in the future.

As an Indian national, I’m obviously proud too of the increasing role the subcontinent is taking in shepherding these new technologies forward.

These are truly exciting times, filled with opportunities for our investors and I can’t wait to see what happens next.

India’s appetite for alternative, eco-friendly tourism provides strong economic support

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India’s growing middle classes are emerging as a group of alternative, eco-conscious consumers who are as active in the country’s travel and tourism industry as overseas visitors. With the industry as strong as ever in India, the growth of eco-friendly accommodation and tourism services is already underway.

India’s growing middle classes and their disposable income is something that is increasingly written about, reported on and discussed. One reason it’s such a popular topic is that the sheer scale of the country’s population means that when they mobilise as consumers, it has an impact way beyond most other countries.

One way in which India’s population has begun to use its consumer power is through holidays and vacations. The latest report from the India Brand Equity Foundation, or IBEF, shows that the travel and tourism industry in India is expected to more than double from $234 billion in 2017 to $492 billion in 2018.

In addition to that, the April IBEF report also highlighted that based on travel and tourism foreign exchange contributions to GDP, India ranked 7th out of 184 countries. Indeed, travel and tourism is the third largest foreign exchange earner across the sub-continent.

However, it’s not just overseas visitors that are fuelling the growth of travel and tourism across India. Demand from staycationers and a desire for alternative and eco-friendly accommodation, is also proving an important driver.

An appetite for the alternative

According to the senior vice-president and head of accommodation at Booking.com, India is among the online holiday portal’s top 20 fastest growing markets for alternative accommodation. That excludes traditional hotels and resorts and includes home stays, cabins and treehouses. Figures from its database shows that around 15% of the around 880,000 Indian accommodations listed on the website, are classed as alternative.

But that’s not all. Booking.com’s senior VP Pepijn Rivjers also recently told Indian journalists that while some 33% of global travellers prefer to stay in eco-friendly accommodation, that rate surges to 75% when it comes to Indian travellers’ bookings. That’s the same for vacationers from India who choose to travel overseas, or visit a different region in their home country.

With alternative accommodation bookings accounting for 20% of the company’s total revenues in 2018, Rivjers considers India as one of its most important markets, right now.

Government supports eco-friendly hotel industry

While its clear that India’s population has a keen interest in supporting and preserving their country, it’s becoming abundantly clear that the Government shares a similar mindset. Its support of businesses, start-ups and ensuring the supply of affordable and modern housing is adequate for the population, perfectly underscores such an attitude.

However, a continued desire to promote and encourage eco-friendly activities is also akin to the population’s appetite for sustainable holiday accommodations. In the latest fight against plastic pollution and in response to a rise of single-use plastic food containers in some regions, action is being taken.

Recent meetings between the Kerala City Corporation, the Kerala Hotel and Restaurant Association (KHRA) and the city’s food aggregators have focussed on the growth in single use plastics refuse in the city. The local Government is keen to ensure its a shared responsibility among everyone involved, to consider more eco-friendly packaging options for their food sales and deliveries.

One suggestion from the local government is to encourage restaurants and food delivery firms to charge their customers a little more, to support their use of typically more expensive eco-friendly food containers.

KHRA commented in a report that some restaurants have chosen to improve their food packaging with no straws available in some and only paper straws on offer in others.

“Such interventions are happening and it is a welcome move. But unless we get suitable eco-friendly alternatives, we can’t implement it. If such alternatives are made available at nominal rates in the market, then we can implement it across all the hotels,” said B Vijayakumar, secretary of the district chapter and one of the secretaries of the state chapter of KHRA.

However, while India’s demand for eco-friendly travel and tourism service and accommodation offerings is seen as a boost and a bit of a surprise to some, it’s an attitude that Red Ribbon understands and shares in. That’s why we created Eco hotels, the world’s first mid-range eco-friendly, carbon neutral brand of hotels and alternative holiday accommodation.

Sustainability is an essential part of India’s economic future and the Eco Hotels brand will help support that, today and for years to come.

 

 

Red Ribbon CEO, Suchit Punnose said:

Sustainability, climate change and carbon neutrality are important topics and while they’re gaining traction on a global scale, it’s something that we at Red Ribbon have been investing in for some years.

Eco Hotels delivers on everything that India needs for a sustainable and economically healthy future. But, more than that, it also reflects the broad view of a population that is proud of the country they live in and want to ensure the beauty and opportunities they’re now enjoying, will be available to future generations, both from within India and overseas.

That’s why we’re confident the Eco Hotels brand can deliver as an investment from a financial perspective and a sustainability one, too.

 

Climate Change recognition and energy inefficiencies

Climate Change recognition and energy inefficiencies

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Climate change and carbon emissions feature in most of India’s political party’s manifestos, as the electorate votes to decide on the Government for the next 5 years. However, tackling climate change and reversing the recent growth in India’s CO2 emissions will take more than lip service from politicians hoping to win votes. We discuss the importance of following through on eco-friendly and carbon neutral plans.

Changing weather patterns and health problems related to air quality, are just two of the many issues affecting India – and other countries – today. Taking steps to improve the environment aren’t always easy and nor do they always garner the required support, at least in the first instance.

However, some four years after signing the Paris Agreement, many of India’s political parties, including the BJP and INC, have included plans to tackle Climate Change in their political manifestos. This is a major development from the 2014 elections and shows that the topics of air pollution, water scarcity and carbon emissions, are clearly becoming more important.

For the BJP, air pollution is treated as a priority. It states it would introduce a clean air programme across 102 cities, with a target of reducing pollution by 35% over the next five years. For INC, air pollution was also considered important enough to discuss, as it said it would be named as a national public health emergency. However, no specific targets were outlined.

They are not alone in detailing plans to reduce air pollution, with other parties also promising investment in reducing air pollution and using cleaner, renewable energy.

Indeed, the use of renewable energy in technological advancements that support India’s economic growth forecasts, would most certainly have an impact in a relatively short timeframe, due to the sheer size of the country and its population.

Of course, just how far any policies relating to reversing climate change and helping to improve the health of India’s many inhabitants will actually be further developed and implemented, remains to be seen.

India’s CO2 emissions rise

Shortly before India’s political manifestos were released and the electorate embarked on a series of votes that will select the next Government, the latest Global energy and CO2 Status report from the International Energy Agency was published. It showed that India’s carbon emissions rose by 4.8% in 2018 from 2017.

That increase in emissions was higher than both the US and China, which are the world’s two largest carbon emitters. The rise in India’s carbon emissions, meanwhile, was attributed to increased consumption of coal.

To put the near 5% increase in CO2 emissions into context, the global average CO2 rise in 2018 was calculated at 1.7%, less than half the increase across India. India is currently the fourth largest emitter of CO2 and its increased use of coal in 2018, was part of a wider trend in which coal accounted for 30% of all global emissions last year.

Of course, India isn’t the only country where emissions rose. However, its notable that India’s use of coal grew by more than any other country. In fact, the report shows coal use fell in the US, Europe and Japan. It’s also interesting that the IEA did point out that despite the huge increase in CO2 emissions, per capita emissions in India are below the global average.

That suggests the country is moving in the right direction and with some further improvements, including even less reliance on coal for energy, the country can help to make a real difference to lowering global CO2 emissions.

Carbon neutrality

Together, these two important developments highlight the growing importance of tackling Climate Change and creating, then effectively promoting, the use of sustainable, low carbon emitting energy projects, businesses and general practices.

At Red Ribbon we’re already doing our part to promote cleaner air and sustainable energy solutions. But our ambitions don’t stop there. We’re also interested in supporting India’s economy and creating eco-friendly, sustainable investment options for those interested in securing their share of returns from the still strong growth across India’s various industries.

Eco Hotels is one such investment opportunity that we’re proud to be part of. The first of its kind, this carbon-neutral hotel brand has sustainability and emissions-controlled planning at its core.

Not only does it provide domestic and international travellers the opportunity to visit parts of India in a cost-effective way, the brand has also been designed to ensure it gives back to more than just India’s financial economy.

Sustainability is increasingly important to India’s future, as it is across the globe. Eco Hotels gives investors the chance to truly diversify their portfolio, while being part of an expanding eco conscious that tomorrow’s business leaders will support and develop even further.

 

 

Red Ribbon CEO, Suchit Punnose said:

There are an increasing number of developments pointing to the importance of tackling climate change and lowering CO2 emissions. These details have always been important to us at Red Ribbon and are more than a consideration when we create new businesses and investment opportunities.

Eco Hotels is just one way that we continue to support and promote sustainable living and investing across India and we know it will be among those businesses that stand the test of time in India. Not just as a brand, or even as an example of sustainability for the economy and for investors, but also as a way of creating new businesses, by always keeping the future of the land it’s built on in mind.

 

India's eco-friendly stance on plastic pollution reduction

India’s eco-friendly position on plastic pollution reduction

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Action against pollution is growing and India is emerging as a country willing to take a tough stance on the . It’s previous announcement on eliminating single use plastics in the country by 2022 has won praise from the UN and now, it has amended a rule to end the importation of plastic waste into the country. This week we highlight India’s eco credentials and why it’s the perfect country for the eco hospitality industry.

India’s promotes eco-friendly policy through plastic pollution reduction

India’s commitment to reducing plastic pollution was further highlighted last week, by high praise from the UN Environment acting Executive Director and a new directive from the Election Commission, for political parties to avoid the use of single-use plastics during campaigning.

Both these developments follow the country’s plan to ban single-use plastics in the country by 2022 and also, a March amendment to its Hazardous and Other Wastes (Management & Transboundary Movement) Rules, which bans the import of waste plastics across the entire country.

While India isn’t alone in its commitment to limit the level of plastic waste around the world, due to the sheer size of its population, the success of such plans would prove a huge boon for the broader eco-friendly cause.

Praise for India’s tough stance on single use plastics

The UN Environment acting Executive Director Joyce Msuya, told independent India newswire, IANS, that the countries plan to eliminate single use plastics in less than five years was “a tremendous move by the Government”.

That announcement was made by the Indian government in August 2018 and has been followed up more recently, with an amendment to an existing rule regarding the importation of plastic waste.

Previously, India had banned such activity, with the exception of certain zones around the country. A number of companies worked to evade the ban by operating in those zones. That led to a notable increase in the amount of plastic waste that was imported into a country that already creates some 9 million tonnes of its own plastic waste, each year.

From August 31st 2019, that activity will cease and India can turn to finding suitable ways to recycle more of its own waste, than the less than 50% it currently manages. Once the importation of 48,000 tonnes per year of plastic waste stops, India can then begin working on sustainable solutions to manage its own single-use problem.

However, while ending the importation of plastic waste is good for the local environment, its less beneficial on an economic front. It’s possible

An eco-conscious country

As this recent eco-friendly and anti-plastic pollution action highlights, India is not among those countries who doesn’t believe the science behind the pollution headlines. Indeed, it’s a country that is taking more steps than many others to put sustainability and an eco-conscience at the heart of its future growth.

That’s an attitude and outlook that we at Red Ribbon identify with. Yes, we work hard at uncovering investment opportunities that produce the right level of returns. But also, we only consider the creation and support of sustainable businesses and projects. Ideas that will help support the global environment and reduce the amount of energy and natural resource hungry developments, that remain popular among other investment plans.

Eco-hospitality is an industry that is growing in size and popularity, two important details supportive of a healthy return on investment.

The creation of the economical and ecological, carbon neutral Eco Hotel, is something that attracts many visitors. Not only from the millions of people from within India who enjoy travelling around the country, while exerting their eco-conscience at the same time. But also, holiday-makers around the world who want to enjoy India’s scenery and culture without impacting on it, in any way.

This latest raft of news highlights that India is the perfect location for the Eco Hotel brand to begin its journey. We know it will help support the country’s economy for many years to come, just as the country and government has supported the development of a carbon neutral, sustainable, eco hospitality industry.

 

Red Ribbon CEO, Suchit Punnose says:

As an entrepreneur and business man, I’ve always understood India’s desire and ability to become a country that will support the right business ideas that can, not only have lasting and positive impact on a national scale, but on a global one too

That’s why Red Ribbon has been there every step of the way as Eco Hotels was developed and has become a popular destination for holidaymakers of every type, including those with a keenly developed eco-conscience.

Eco Hotels’ carbon neutral design is something that can work across different countries, continents and landscapes and now is the right time to support and invest in sustainable, eco-hospitality.

Affordable housing and slum redevelopment

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Slum dwellings across India’s urbanised areas have been around for as long as many can remember, growing up alongside wealthy parts of the city as the low paid workforce required to keep those cities working, struggled to find somewhere affordable to live. Indeed, in a country with a population of 1.37 billion, according to the latest UN figures, at least around a quarter of the urban population are living in slums, many of whom don’t have reliable access to sanitation, electricity or homes that are safe to live in.

Recent fires in neighbouring Bangladesh, in the capital city and a coastal slum area, highlight the problems of slum dwellings and the dangers they pose to those living in them and the surrounding areas, too.

In recent years, a number of ways to improve or even remove the slums of the Indian sub-continent, have been discussed. One previously popular way to modify India’s – and other countries’ – slums, was to remove them completely, bulldoze them out of existence. However, while this method does eradicate many of the issues that arise with slum developments, it also displaces everyone who lives in them.

After assessing different approaches to solving the problem of slum areas, which has gained in importance amid the increasingly rapid urbanisation of India, two answers have proven popular enough to take forward. They are:

  • Improve existing slum areas, without displacing those existing households and eradicating their investment.
  • Find ways to build affordable housing across India’s cities for lower income households to live in.

With those solutions now being formalised by the Government, the next step is to find a way to finance these methods, in order to achieve the target of creating affordable housing for the entire population by 2022.  

PPP and affordable housing

Among the ways in which India is seeking to provide enough affordable and safe housing for its growing urban populations, is through Public Private Partnerships (PPP). As the value of land is high in cities and nearby urban areas and can account for up to 60% of the total cost of housing developments, the Government has sought a way to lower the cost of urban real estate. They do this by allocating a proportion of publicly owned land to be developed by private companies and investors.

This vehicle has been created to encourage private real-estate investors, who previously have predominantly favoured higher income developments, to take an interest in India’s affordable housing sector. The potential rewards are three-fold:

  • Affordable and safe housing in the right areas, for India’s fast-developing urbanisation.
  • The beginning of the end of the growth of slum areas in urban regions.
  • Reliable and attractive returns for investors.

There are a number of ways in which this works financially for investors, all of which result in a notable increase in affordable housing across the areas of India in which it’s required.

Coupled with the improvements to investing and doing business in the country, the option of affordable housing and real-estate as an investment vehicle is one that is beginning to appeal to a growing proportion of investors. Both from overseas and within the country, too.

How to access India’s affordable real estate investment opportunities

Of course, knowing about and understanding the real-estate opportunities in a country whose population is undergoing a fast and significant change, is one thing. Accessing those opportunities in a secure and moderated fashion is quite another.

However, doing business in India has become easier, more transparent and accessible to all kinds of investors. Among the ways in which investors can benefit from the opportunities in India’s real estate sector, is through Funds specifically created for the purpose.

According to data from JLL, the value of investment grade, real estate projects under construction, has risen from $173.9 billion in the fourth quarter of 2012, to $242.6 billion in the second quarter of 2018. That number doesn’t take into account future options, plans or approved, shovel ready projects.

Red Ribbon will soon launch its own Indian Real-Estate Fund, to bring investment access into the sector to those investors interested in diversifying their portfolios with something that will benefit from Government support and help provide a solution to a real need from the existing and changing population.

As with all of Red Ribbon’s asset management options, sustainability, eco friendly and broadly beneficial outcomes form the basis of most of the assets that make up the Fund. Providing affordable and sustainable properties for the millions of people moving from rural to urban living is a challenge that can be met, provided every investor in Indian real estate takes it into consideration.

 

Red Ribbon CEO, Suchit Punnose said:

India’s Government has shown real willing to support the rapid urbanisation of the country and encourage a country in which investors can feel confident in doing business, both from a transparency and prospective returns, perspective. Red Ribbon is proud to be the forefront of supporting an economy that is of major importance on a global scale, while working to create a country with real prospects that future generations can enjoy and reap the benefits from.

Our Indian Real Estate Fund will help provide affordable and sustainable homes for the millions of people moving from one way of life to another. It also gives investors the chance to create a well-balanced investment portfolio, with exposure to a growing and developing economy.

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Modular Construction

Saving Time, Money and the Environment through Modular Construction

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Saving Time, Money and the Environment through Modular Construction

Modular construction methods are often hailed as a more cost-effective option, but that’s far from the only benefit pre-fabricated buildings can have. We take you through how modular construction firms can save on time, the environment and money, while also delivering a return on investment many would be happy to receive.

It’s no secret that global real-estate related costs are rising. The value of property is broadly on the up. Meanwhile, the cost of materials is also climbing, while skilled construction professionals are becoming more scarce, pushing their value up, too. But there is a solution to this problem: modular construction.

Just like many other countries, across India, many people still have a dream of owning their own home. However, with more people moving into urban areas of the country from the rural regions, that’s not always an easy achievement, even for those with stable, well-paid jobs. Indeed, research suggests some 110 million additional housing units will be required by 2022. That’s a tall order and once that is simply unachievable through traditional construction methods alone.

However, major advances in modular construction techniques mean homes can be built quickly, in an environmentally friendly way, while also proving a more cost-effective option.

Saving you time and money

Much scepticism remains over how reliable and practical modular construction techniques are. Although, there are signs the opinion of the sector is improving as more businesses opt for it over traditional building methods.

One major factor that’s encouraging more businesses and home-buyers to choose a modular property is time. Once you gain permission, finalise plans and pay deposits, the fabrication of a modular building is much quicker than one constructed on site, in a more traditional manner.

That’s because templates and machinery in an established and regulated factory can create the specified shell of your building quickly and to approved safety standards.

Once those elements of the building, be it a home, a commercial office or even a hotel, are created, it’s then checked and verified through a reliable, tech-based system. This ensures all the required parts are there, of the right size and structure and are ready to be transported to the previously prepared building site.

This is where the costs savings come into play. Where a traditionally built property can require up to hundreds of on-site construction professionals to build up walls, ensure measurements are perfect and all the materials are as they should be, a pre-fabricated construction team is typically much smaller. That smaller team will also need much less time on site to construct the unit and ensure its safely in situ as planned, ready for the next step.

Again, with so much of the required works already done, the modular building requires only a little additional work on site, before the owner can get to work on the inside and make it habitable.

This means that while the cost of the materials used to construct a modular building aren’t particularly cheaper than for any other property, costs are saved through the shorter period of time skilled construction professionals are required on site. Meanwhile, the requirement of fewer construction professionals is also a financial benefit.

Environmental benefits

We then move onto the environmental benefits of the modular construction sector. First of all, the question of sustainability is one the massive global construction sector is increasingly being asked to answer:

  • Are the chosen materials sustainable, eco-friendly and long-lasting?
  • Can the pre-fab factories use sustainable energy sources?
  • Are the pre-fab factories sustainable and energy efficient?
  • Can they construct increasingly eco-friendly modular homes off-site?    

These are just a few details that require a positive answer from those modular construction companies who are beginning to gain support, momentum and business across India.

Modulex Modular Buildings PLC is one modular construction firm that can answer in the affirmative to the above questions and many more. It’s the world’s largest and India’s first, steel modular building factory.

Like all Red Ribbon investment projects, Modulex was created with three essential pillars of sustainability in mind:  Planet, People and Profit.

At a time when we need to find more economical ways of providing everything the huge population of India needs, in a way that protects their environment, while also delivering on profit to the investors who support those businesses, Modulex delivers on all three and is well-placed to do so for many years to come.

Red Ribbon CEO, Suchit Punnose said:

India’s Modular Construction market is expected to be worth close to $130 billion by 2023 and at Red Ribbon we think its imperative that as much of the growing industry as possible, is created with sustainability in mind, from the outset.

Providing the answers to India’s housing and construction needs is one thing, but doing it in a way that future generations can benefit from it on multiple levels, is something every investor in the industry should aspire to. That’s why we support Modulex and strive to ensure its green credentials can match its productivity and investor returns.

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Indian Rupee

Broad-based planning supportive of India’s economic ambition

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It may be a New Year, but in many countries, old worries remain. Take the UK, for example. Brexit is as uncertain as ever and that’s unlikely to change any time soon. Not only have forecasts for economic growth in the country been tempered by the lack of a clear path for Brexit, the latest survey data from IHS Markit have served to underscore the worry felt by consumers and businesses, with the country’s dominant services sector close to stagnation during December.

However, the UK isn’t the only country experiencing uncertainty as to how 2019 will unfold.

India has an interesting 12 months ahead as incumbent Prime Minister Narendra Modi must work hard to maintain his position, after recent state election results make the likelihood of a new leader a real possibility. However, Modi has begun 2019 with ideas and a plan to show his support of the large farming industry, which is unhappy with the lack of fiscal support from the Government.

Speaking at the India Science Congress this week, the India PM urged scientists to find low-cost solutions for ‘social good’, including the creation of more affordable and balanced agriculture industry and using big data analytics to improve crop yields for farmers with smaller holdings. Introducing this element to the PM’s broader outlook for India’s economic development may always have been the plan.

Although, there will likely be many who will say its merely a move to encourage more votes in an election year. Regardless of the truth, this latest step is a further sign that Modi’s economic ambitions for the country remain front-and-centre.

Economic outlook

Even before this latest speech, the outlook for growth in the country was upbeat, particularly when compared with global competitors. Despite some GDP forecast downgrades from the likes of Fitch Ratings and the OECD – to a still healthy 7.2% and 7.3% respectively – India is assessed to have outpaced China during 2018 and to do so again in 2019. India’s finance ministry, meanwhile, forecasts economic expansion of 7.8% during 2019, which would likely be similar to the average pace of growth across 2018, despite the slowdown to 7.1% in the third quarter.

Indeed, it appears that the third quarter GDP number is partly behind most of the forecast reductions, although other details also weigh.

They include:

  • Generally weaker global GDP outlook.
  • Global trade worries.
  • Liquidity squeeze.

Modi and his Government, however, are upbeat and standing firm on their positive outlook. Many would say, with good reason.

Despite the difficult global scenario, some developments have been in India’s favour. The high price of crude oil has receded, despite the sanctions against Iran. Meanwhile, the country has moved up the World Bank’s ‘ease of doing business’ rankings. And while there has been some disagreement over the Government’s demands for the Reserve Bank of India to relax some restrictions on weaker banks, inflation has remained under control.

The decision to remain firm on many fiscal elements of governance while creating a more supportive backdrop for businesses and consumers, has been a core driver of the strong level of economic expansion across India. It appears that focus on moving forward with policies designed to encourage start-ups and innovation is very much still in place.

Modi told delegates at the Science Congress that following on from its success of improving its ‘ease of doing business’ score, it must now work to improve the ‘ease of living’ in India. That requires a broad-based plan; working to support businesses across every industry, supporting innovation and new ideas, job creation across every industry and providing a stronger and more reliable infrastructure for consumers.

At Red Ribbon we understand the importance of introducing innovative developments into an existing industry, which is why we believe the Eco Hotel industry is one that can help ensure India’s economic growth ambitions will succeed and even exceed expectations.

Red Ribbon CEO, Suchit Punnose said:

An economy the size of India’s will only flourish if a broad-based outlook is in place that also supports innovation and allows every industry to move in an agile fashion, particularly when it becomes clear that a new approach is required. India’s leisure and tourism industry is a case in point. It draws tourists from within and without the country to its variety of regions and attractions. Introducing a new type of accommodation, such as Eco Hotels, will work to add yet another string to India’s bow as the destination of choice for an even broader range of holiday-makers and business travellers, while supporting jobs growth and industry innovation at the same time. As long as business start-ups and industry innovations are supported and encouraged, they will only have a positive impact on India’s economy, the standard of living and the global environment.

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India Cryptocurrency - Red Ribbon Asset Management Plc

India retains cautious Cryptocurrency stance

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India retains cautious cryptocurrency stance

A raft of recent news reports and blogs posts, suggest that those involved in the cryptocurrency markets are becoming a little impatient with the Indian Government and the Reserve Bank of India’s (RBI) caution relating to that specific financial sub-sector. The reports contain some conflicting views from different members of the two panels that are working to research cryptocurrencies and put a regulatory framework in place. However, despite a lack of real progress it appears the overall, official tone towards the crypto market is less negative than it previously was.

One of the Indian government’s panels currently researching the cryptocurrency markets is set to submit a report on its findings. That keenly awaited report has been delayed from July 2018 and right now, no time line is in place for it to be finalised and published. This detail is the cause of some of that unrest.

With that report being delayed, it’s no surprise that any details on possible virtual currency regulation in India is also taking time to be finalised. Without the approved findings of the official report, it simply doesn’t make any sense for a regulatory framework to be put in place.

Among the most likely reasons behind the slow progress of any official view and policy on cryptocurrencies across India, is the lack of a global steer. Also, and perhaps more importantly, is a lack of detailed knowledge and information on exactly what impact cryptocurrencies can have on the economy, particularly over the medium-to-long-term.

Some support for virtual currencies

While uncertainty over exactly how India will regulate and permit cryptocurrencies to be traded and taxed remains, it does appear that the Indian government is more positive on them becoming a permanent part of its financial landscape, than it was.

The Financial Stability Board (FSB), which India is a part of, has said that virtual currencies are not a threat.

“The FSB has undertaken a review of the financial stability risks posed by the rapid growth of crypto-assets. Its initial assessment is that crypto-assets do not pose risks to global financial stability currently,” the RBI report quoted the FSB as stating.

That’s a positive note and relevant to the discussions and research that are ongoing.

Getting it right

Despite that glimmer of support for crypto-currencies, global governments, central banks and other relevant bodies continue to move slowly with regards to implementing official regulation and plans to regulate Bitcoin, et al. But really, is it any wonder?

After surging in value during 2017, many virtual currencies then lost much of those gains during 2018. And now…? Well, the future for those currencies is very much unknown, particularly coming against a backdrop of so much broad-based uncertainty elsewhere.

Of course, the blockchain system that underpins cryptocurrencies is something that the Indian government and RBI are interested in, as are other countries and industries. But, having regulation and utilising one, is likely impossible without also having the other.

This is without doubt, another major reason why the panels formed to investigate cryptocurrencies are taking their time to collate all the details and submit a detailed and useful report. If blockchain is to become a part of India’s government, business industries and the economy, then it’s essential that any risks relating to supporting a regulated cryptocurrency network is clear, robust and performs the task it was created for.

India as a nation is one that welcomes change and new ways of doing things – provided it’s beneficial for the economy and its population. Even though it’s likely that virtual currencies and blockchain fall under that category, both the government and the RBI are right to be cautious over any policy and regulation that’s created, so they can be certain it’s right for India’s economy and its huge population, with its growing appetite for all things digital.

Nobody understands this market potential quite like Red Ribbon, which has placed India at the heart of its investment strategies since the company was founded more than a decade ago. Drawing on a pool of established expertise on Indian market conditions, Red Ribbon Asset Management offers a unique opportunity to share in that potential.

Red Ribbon CEO, Suchit Punnose said:

India’s appetite to be at the forefront of new technology is continuing to develop. However, even though some countries have begun a light touch regulatory oversight on cryptocurrencies, that doesn’t mean the government or RBI will rush into something that has the potential to impact India’s economy and financial landscape over the longer-term.

Indeed, a cautious outlook doesn’t mean digital currencies have no place, or an insignificant one for India’s economy. In fact, it’s more likely to suggest the opposite and that as a country, the government and central bank want to be sure they get their policy implementation on it, just right.

At Red Ribbon, we have the same attitude to new and developing opportunities. We’re willing to take some risk on new industries and investment opportunities, but only when we know exactly what those new industries have done and have the potential to achieve. With Eco Hotels and Modulex, we’ve worked hard to ensure we understand everything those businesses stand for and what they’re capable of, not only from an investment perspective, but on a global sustainability aspect, too.

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Eco Hospitality benefits India economy - Red Ribbon Asset Management Plc

How Eco Hospitality provides a double benefit for India’s economy

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How Eco Hospitality provides a double benefit for India’s economy

The World Bank’s January 2019 Global Prospects Report shows that the United Nations institution continues to expect economic growth across India to expand in 2019 and beyond. The group’s estimate for full-year GDP growth in 2018 is for 7.3%. Meanwhile, the World Bank is also anticipating that level to rise to full-year GDP growth of 7.5% in 2019, 2020 and 2021.

There are many details that go into a forecast like this, which means it is an absolutely achievable and likely outcome. However, if some of the assumptions made in those forecasts don’t proceed as expected. Or, something completely unexpected occurs, then India’s economy could either exceed or fail to achieve that forecast rate of growth.

Another interesting figure that has recently been published about India’s economy, comes from the Indian Government’s Ministry of Statistics. According to its 2018 Environmental statistics, the natural capital in 11 of India’s states has declined. Natural Capital “refers to all types of environmental assets existing in the environment” according to the report.

Once again, a lot of work and details go into creating these data and stats to produce reliable and correct information.
The figures in that painstakingly generated report suggest that, at least in some parts of India, pure economic growth is being achieved at the expense of the country’s natural capital, or native environment. And that’s not something that can be allowed to continue unchecked. At least not if the economy is to remain on a long-term and sustainable, positive economic growth path.

 

Sustainable, eco-industry

With that in mind, we now turn to a specific part of India’s growing economy, the Eco, or green sector. While much thought is being put into how to ensure residential building and consumer habits are increasingly sustainable and Eco-friendly, another key area in which India is already developing an Eco-footprint in, is hospitality.

For a country that welcomed over 10 million overseas tourists during 2017 – an increase of 14% in number and 15.4% in income generation – it’s a sizable industry. In GDP terms, the total contribution from travel and tourism across India made up 9.4% of India’s GDP in 2017, likely rising to around 17% in 2018, according to the World Travel and Tourism Council.

If, however, efforts into supporting and growing the eco-hospitality sector of the travel and tourism industry continue, or even gain pace, not only will green hotels, eco holiday destinations and sustainable tourist hot spots generate welcome income for the economy, it will also help improve and even expand the country’s natural capital. That’s something that’s a double boon for the sub-continent that consistently strives to develop, advance and improve.

Eco Hotels is among the green businesses that are investing in India’s economy, in a sustainable way. The world’s first carbon neutral, mid-market hotel brand has been operating since 2012 and is a popular option, for businesses, investors and also among those travellers who include Eco credentials in their search for holiday accommodation.

Growing India’s eco-hospitality sector is something that is will undoubtedly help ensure the country’s travel and tourism industry will contribute to both the financial GDP figures and its nature capital. But, even better, positive eco changes in one country actually contribute to green credentials and work towards stopping climate change on a global basis too.

With so many benefits to be gained from Eco hospitality, there’s little doubt as to just how valuable it is to India’s economic, business and green ambitions.

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.

Red Ribbon CEO, Suchit Punnose said:

Understanding the full implications of the way in which a country achieves economic expansion is an essential part of working towards maximising that country’s growth potential, while also making sure all the ingredients required to continue growing and innovating remain available. While the 11 states experiencing a decline in their nature capital account for fewer than half of India’s regions, its not something that should be ignored.

With Eco Hotels, Red Ribbon is putting both India’s economy and nature capital at the heart of its investment strategy. Combatting climate change, promoting sustainable industry and creating profitable carbon neutral businesses, is the right way to create an investment that will remain popular and relevant for years to come.

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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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