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Sustainable Growth Archives - Red Ribbon Asset Management

The Wolves of Wall Street aren’t coming to London…they’re heading for Mumbai

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Most people would accept their fate more stoically: but when Charles Yerkes was wiped out by the Great Chicago Fire of 1871 and then promptly convicted of public larceny, he blackmailed two prominent politicians and President Ulysses Grant pardoned him to keep his mouth shut. Yerkes walked free and went on to build the world’s largest telescope (1892), financed Chicago’s streetcar system (1895) and finally made it to London by 1900. Using methods suspiciously similar to those that got him in trouble in 1871, he built an underground railway line between Baker Street and Waterloo and called it …well, you know what he called it. The Railway Magazine from 1906 grumbled the Bakerloo Line was a “gutter name not to be expected from an English Railway Company”.

Not that Charles Yerkes could have cared less what the public thought: this is the man who told the judge at his trial that he lived by the maxim of “buying up old junk, fixing it up and dumping it on some other fellow” and modern-day commuters packed into his Bakerloo line might find that still has some resonance.

But bear with me, here’s the point: those Edwardian Londoners who objected to Yerkes’ gutter language in 1906 wouldn’t actually have known who to blame because his Bakerloo investment was made through nominee companies to stop it becoming public. By 1927 no fewer than 27% of listed UK companies were owned by American overseas interests, almost none of which were publicly disclosed because of the supposed taint attaching to this brash new brand of capitalism running rampant on Wall Street. British consumers and investors wanted their companies to be homegrown, home owned and home run: most of them would never know how wrong they were.

How things have changed.

Now we have entire Whitehall Departments devoted to drumming up foreign direct investment (FDI) and the wolves of Wall Street are more welcome than ever before, but efforts to attract them over have been stalling over recent years and often failing altogether. FDI into the UK has plummeted since 2016: falling 14% in the year to March 2019 alone, with a 29% decrease in related employment in key sectors including financial services and automotive manufacturing (infrastructure is even worse, dropping by a whopping 40%). And while UK inward investment has slumped equivalent returns for other EU states are showing a relative increase, which might give you a clue to the underlying reasons. It is, as you will have guessed, the “B” word.

Archer Howard, Chief Economic Adviser to the EY Item Club articulated the cause in sober and non-gutter language “foreign companies have become more cautious about investing in the UK due to Brexit uncertainties

Quite so…

Things are very different in India, where crucial FDI policies are starting to reap conspicuously handsome returns.

On the subcontinent FDI is already a major source of non-debt finance with key investment privileges and tax exemptions, not to mention lower wage structures, proving particularly attractive to overseas investors. Figures released by the Department for Promotion of Industry and Internal Trade reported last year’s FDI inflow into India at $ 44.37 Billion: $3.4 Billion of that from the United States, with Singapore coming top of the pack at $ 16.23 Billion. India also came out top on Commonwealth sourced FDI funding so it’s obviously spreading its net wide when it comes to attracting overseas investors, and that’s likely to remain the case for the foreseeable future given the Modi Government plans to secure $100 Billion FDI inflow over the course of the next two years with a range of initiatives including relaxed rules for e-commerce and telecoms enterprises and removal of prior government approval on real estate projects.

Of course, whether that would make it any easier for a modern-day Charles Yerkes to pitch up in Mumbai is, a different matter altogether…

Red Ribbon has been specialising in India’s Markets since the company was founded more than a decade ago, bringing unparalleled expertise to its investment policies on the subcontinent with specialist sectoral advisers working from it’s Head Office in London in conjunction with more than a hundred local experts on the ground in the subcontinent itself. And by drawing on that body of expertise it offers investors an opportunity to secure above market rate returns in this, the fastest-growing large economy in the World.

                                                                 

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Executive Overview

It’s impossible to overstate the importance FDI has for any modern economy, not least because it provides the sort of secure and resilient, non-debt based finance needed to sustain growth without repeated recourse to taxes and public borrowing. And of course India is the fastest-growing large economy on the planet so I’m not surprised to see it placing such an emphasis on FDI initiatives.

Tax concessions and administrative incentives have made the subcontinent a much more business-friendly environment for overseas investors over recent years and further concessions included in the recent Union Budget will now underpin and strengthen that trend.

That’s one of the reasons why I’m convinced there’s never been a better time to invest in India and take full advantage of the opportunities its markets have to offer.

A Union Budget for Growth… Investing in India has never made more sense.

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The London based Institute of Chartered Accountants, obviously knowing a thing or two about balancing books and cooking up growth, ruffled a few feathers in Whitehall recently by criticising the Government for failing to invest in the regions, failing to invest in transport, failing to deliver fibre optic connectivity and allowing major public infrastructure projects to fall into stasis. Talk about kicking someone when they’re down, but it’s hard to disagree: especially with Hinkley Point still clutching at its footings ten years after commissioning, road, rail and utility networks creaking at the seams and public investment at an all time low.

But half a world away in India, things couldn’t be more different. This year’s Union Budget included a $125 Trillion, five-year splurge on infrastructure investment and just to put it in perspective, that’s enough to give every man, woman and child in the United Kingdom £1,515 to buy half a Virgin annual season ticket from Liverpool to Manchester. And, as ever, the Modi Administration hasn’t been short on ambition when it comes to spending these breathtaking sums.

For a start there are plans to make India a hub for Aircraft Finance and Leasing with new International Financial Service areas and Special Economic Zones; more urban Metro Rail initiatives, more gas grid works (expect more pavements dug up in Mumbai): more water networks and i-ways and much needed airports for the regions.

And even though India already has one of the world’s most extensive road networks, covering 5.5 Million kilometres with more than 10,000 kilometres added in 2017-18 alone, the Union Budget also includes plans to build a further 125,000 kilometres over the next five years (as well as opening up waterways to alleviate road congestion). India’s Highways and Transport Minister, Nitin Gadkari, said the subcontinent’s roads were the “country’s assets” and this Budget emphatically put its money where his mouth is.

And to put that in perspective, the United Kingdom currently has a total of 394,000 kilometres of roads and will have built just 643 kilometres of new highways between 2015 and 2020: assuming, as Costain recently found to its cost, that most of these aren’t cancelled.

Under the Union Budget provisions, Foreign Portfolio Investors will also be able to subscribe for listed debt securities issued by ReITs and as part of a program to encourage trade and give a boost to the Make in India Campaign, customs duties are being flattened on a range of goods including tiles, vinyl flooring and CCTV cameras.

The South Indian Chamber of Commence President called it “a transformational and forward looking Budget”…And he’s right, what’s not to like about it?

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 we look to explore opportunities to share in the potential of this, the fastest growing large economy on the planet.

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Executive Overview

Infrastructure investment is the key turbo charger of all modern economies, and by that standard India has certainly taken its place at the global top table.

The sums announced in last month’s Union Budget are simply staggering and I have no doubt they will now give added impetus to the explosive growth we have seen in the subcontinent’s real estate markets over recent years.

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

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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.

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.

 

Why modular construction is the perfect fit for every want and need

Why modular construction is the perfect fit for every want and need

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Modular construction has been growing in popularity among investors and governments in recent years. The reason? Because without it, the ability to create the housing and other buildings that are required, will be greatly diminished and delayed. This week we discuss just why prefabricated building methods can help countries deliver on their construction development needs.

Why modular construction is the answer to many construction-related requirements

Modular construction is an industry that, up until recently, had been gaining support, interest and investment, relatively slowly. Now, however, the outlook for prefabricated, off-site building construction is booming, from every angle that could be considered.

Of course, we’ve discussed previously that while much modernisation and technical development has greatly altered prefabricated construction techniques, the broader idea of modular construction, isn’t a particularly new one. That begs the question, just why has it become so popular?

An additional, perhaps even more pertinent question that many potential investors into the industry might ask, is why is it the right option for India’s specific needs?

The popularisation of modular construction

As the global population climbs, a lack of investment in the construction sector; both from a technical and modernisation perspective and simple delivery basis, mean that right now, in a number of countries, there is a huge shortage of residential housing.

Even in countries and regions where home building has a rich heritage, its proving impossible to construct the amount of homes that are required for the number of residents who need them. Indeed, while existing populations are struggling to find suitable accommodation, current rates of building are set to create a more pronounced future shortage, too.

That’s not to say that traditional home building techniques aren’t fit for purpose. Far from it! New techniques, eco-friendly developments and making the most of a location are all elements of typical, on-site building techniques that are worth the wait.

However, there are also a growing number of situations where inhabitants can’t wait much longer for a suitable home to live in. It’s here where modular, off-site construction has a lot to offer.

Prefabricated construction methods can provide:

  • Cost-effective building.
  • More timely construction timetables, including fewer weather-dependent delays.
  • Better adherence to quality control measures.
  • Delivery of large developments quickly.
  • Easier modification of elements of homes to satisfy specific and changing, local requirements.

The level of skilled construction labour required to construct a modular home, from start to finish, is lower than that of a typical, on-site build. In addition, any delays related to the materials being used for the home, would typically be discovered early on in the process, allowing time for an alternative to be sourced, without bringing the project to a grinding halt.

All of these details, plus many more, work to ensure modular construction is an investment worth making, as returns can only benefit from more timely delivery of the finished product, along with the lower costs associated with the required labour.

India and modular construction

When it comes to modular construction and India’s specific needs, there are additional reasons, to those listed above, that make it a perfect fit. Among them are that it will help drive up construction standards more quickly and in a way that can be easily understood, measured and confirmed.

Given the huge number of homes and other buildings that are required to support, not only the fast-growing urbanisation of the city regions, but also the need for an improved standard of living in rural areas, a construction system that can build trust that building standards are in place and being adhered to, will always be welcome. That’s true, not only for those who will live and work in the properties, but also for:

  • The Government.
  • Modular construction firms.
  • Investors.
  • Construction professionals, of all levels.

Prefabricated construction methods can also make it easier to alter a design and make it more suitable for the very different areas across India. Where small, quick to build homes are required, once a design is created it can be manipulated, as required, reliably and easily.

For those larger homes or buildings, the same is also true. The initial design can be changed as required, with all safety details in place, in accordance to the available land plot and other relevant details.

In addition, let’s not forget the sheer amount of homes and buildings still required across India. No one method is equipped to provide that in a timely manner. Only by utilising all methods, including the modern, modular construction process that’s now available in India and much of the world, can countries hope to home their mainly growing populations.

 

Suchit Punnose, CEO of Red Ribbon said:

Modular construction is an industry that expected to grow by some 75% to around $181 billion by 2026, from its 2018 valuation. To achieve that rate of expansion, it’s clear there’s a real appetite for the industry, on a countrywide Government level and on a business and investment one, too.

The need for housing and commercial buildings that will be safe to use and also suitable for each specific requirement is something that can only be achieved with a combination of modular and traditional construction.

At Red Ribbon we’re proud to support the development of the modular construction sector across India. We know with absolute certainty that our investment in this area will reap benefits for shareholders, India’s Government and population, alike, today and in the years to come.

India’s economic growth outlook remains positive despite weaker-than-expected GDP

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An initial glance at India’s third fiscal quarter GDP data may have proved mildly disappointing for some. However, looking into the deeper details of the report shows a brighter picture than might have been expected. In addition, the data is backward looking and not overly indicative of what the future holds for India’s economy. This week, we take a closer look at the data and consult more timely measures and assessments of India’s economic performance.

Last week India’s Central Statistics Office (CSO) published the latest GDP figures for the country, which showed growth slowed to 6.6% in the final three months of 2018, the third quarter of India’s fiscal year.

The initial reaction was of disappointment, as the number was below the median estimate for GDP to grow 6.7%. Added to that was the downward revision to GDP growth in the previous quarter; the CSO now calculates GDP grew by 7% in the second quarter of India’s fiscal year cycle, down from the 7.1% increase previously reported. However, the report also contained some positive details, particularly with regards to investment activity.

Separately, more timely survey data on the country’s manufacturing sector along with a broadly upbeat assessment from Moody’s Investor Service also provided brighter news on an economy that is still expected to grow at a rate above that of the broader global trend, for some years, thanks to increasingly business friendly policies and the continued urbanisation of a country with a population of around 1.34 billion.

India’s third quarter GDP details

The details of the GDP data showed a mixed performance across the country’s shifting economy. Growth in the agricultural sector proved a disappointment, as it was notably weaker when compared with GDP from the previous year.  The manufacturing sector also posted a slower pace of growth.

Other sectors were much more promising for the future outlook of the country, including strong readings from the construction and the financial and real estate professional services sector.

Meanwhile, the report also showed that average per capita incomes, were higher than the previous year. Add to that, higher levels of consumer spending and investment, along with stronger exports levels and the overall picture of India’s countrywide economic performance in the third fiscal quarter, is indicative of broad health.

In addition to the detail highlighting strength across India’ economy, was the news that despite a weaker than expected reading and a downgrade to the second quarter growth number, other economies are slowing too. That shows that while India is being affected by other global issues, so far it hasn’t lost as much momentum – or looking likely to – as some other countries have.

But, as we know, while the GDP numbers provide plenty of interesting details on India’s economy, it is a backward-looking assessment. Other, more timely surveys and assessments, proved that despite a situation which has resulted in a tough period for many farmers and led to the Government creation of a financial relief package for them and difficulties with Pakistan, the Indian economy remains in a promising position.

Manufacturing growth expands, growth seen steady

The latest manufacturing purchasing managers index from IHS Markit, meanwhile, which was published just hours after the GDP data, showed that activity in the sector grew at the fastest pace in 14 months. Orders, output and employment across the manufacturing industry were all upbeat, providing a boost.

But that wasn’t the only up-to-date piece of positive news on India’s economy. In its latest Global Macro Outlook, Moody’s Investor Service predicted stable economic growth for the country over the next two years. That was despite its view for the global economy to weaken across 2019 and 2020.

As asset investment managers with a specific interest in India, we pay close attention to all relevant details about the country’s economy, plans, Government and investment-related news and opportunities. We know that the final months of 2018 weren’t quite as strong for India as previous quarters. However, policy makers are also acutely aware of this and that detail was among the reasons for the recent interest rate cut – action that will likely be repeated in a few months.

For Prime Minister Narendra Modi, the headline GDP data was likely considered a bit of a blow, coming as the 2019 General Election approaches. As we’ve detailed though, it’s not the only measure to take notice of.

Investment in India remains strong and not surprisingly, worthwhile opportunities are developing all the time. Whether you’re interested in eco-friendly assets, modular construction possibilities or infrastructure related options, India is currently a real land of opportunity for investors and will be for some years to come.

Red Ribbon CEO, Suchit Punnose said:

The latest CSO release of India’s third quarter fiscal GDP are a case in point. The headline number was a little disappointing. However, the details showed key areas performed well and are primed to remain economically supportive going forward. Overall, India’s economy is in a stronger position than other major countries, which is good news for existing and prospective investors.

We continue to identify the best investment opportunities for ourselves and our clients and believe there are many more years of positive investment outcomes across India, ahead of us.

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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India Economic Ambition Planning - Red Ribbon Asset Management Plc

Broad-based planning supportive of India’s economic ambition

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Broad-based planning supportive of India’s economic ambition

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 a 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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Eco Tourism Odisha - Red Ribbon Asset Management Plc

How Eco-Tourism is generating economic boost for India

By India, News One Comment

How Eco-Tourism is generating economic boost for India’s Odisha state

Eco-tourism is becoming an increasingly important part of India’s economic growth. Just take a look at the state of Odisha. Located on the on the Eastern coast of India, on the Bay of Bengal, Odisha’s investment into eco-tourism is beginning to pay off, as it’s expected to generate some Rs6 Crore (£ 700,000) in revenue by the end of the 2018-19 financial year and providing a boost to local Government coffers.

As the popularity of the sector continues to grow, so too will the India Government’s return on its investment.

Of course, this economic benefit hasn’t happened overnight. However, nor has it taken as long as one might anticipate. The Odisha State Government has invested some Rs34 crore (£ 4 million) during the 2016-17 to 2018-19 financial years, into 37 separate eco-tourism locations across the state.

The eco-tourism offerings, created and managed by Odisha’s Forest and Environment Department are expected to reach Rs 10 crore (£ 1 Million) in the 2019-20 financial year, according to the department’s chief conservator of Forests and wildlife.

As you can see, even though the end of the current fiscal period has not yet arrived, the region is already seeing notable revenue generation form its investments, with further growth anticipated. That highlights the popularity of eco-tourism and hospitality as a something that’s more than a passing trend.

For the Indian sub-continent, which is awash with natural beauty and a growing desire to enhance that, with green, eco-friendly and carbon neutral hotels and other hospitality sector developments, now is the perfect time to support that ambition. Not only does it give tourists – from both India and the rest of the world – the opportunity to retain their eco-consciousness even when they travel far afield. But it also provides an option for investors to make socially responsible and sustainable financial decisions, too.

That’s essentially why opting for sustainable and eco-friendly investments is a good decision right now; they provide an option for travellers, countries and investors, who hold to environmental ideals that are now possible.

But Odisha isn’t the only region in India to pursue eco-friendly tourism. There are a growing number of mid-market eco-hotels that are continuing to expand across India. We’ve previously highlighted how Lemon Tree hotels is already proving a success in terms of cost controls and room occupancy rates.

Our own carbon neutral hotel group Eco Hotels, meanwhile, builds on everything we’ve mentioned here – and more. Demand for hotels across India is strong and rising, boosted in part, by the increasing middle-classes of the region.

Creating an eco-friendly hotel chain fulfills all the needs that we have identified:

  • The growing number of hotels across the subcontinent.
  • Creating sustainable, carbon neutral tourism options.
  • Giving investors peace of mind that their decision to support Eco Hotels, is a socially and environmentally responsible one, as well as a sound financial one.

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:

The quick and impressive revenue generation from the commitment of an entire Indian state to eco-friendly tourism, only works to highlight our belief that socially and environmentally responsible developments and investment decisions, are the right path for, not only Red Ribbon, but the broader investment community.

Eco hotels, that are created to provide business and leisure travellers with the accommodation they desire, in the location of their choice, is just one way we are supporting this view. With demand for such options growing both domestically and internationally, the Eco Hotels brand is proud to be built with carbon neutrality and green credentials as part of its fundamental core.

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

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10 Reasons to Invest in India by Red Ribbon Asset Management Plc

The place to be: 10 reasons to invest in India

By Archive, India, News No Comments

India’s economy and business landscape are changing, ushering in a period of growth, prosperity and investment opportunities. All the ingredients are in place for India to become a world leader investment destination.

Let’s look a little more closely at just a few of the more compelling reasons why investing in India is an opportunity you can’t afford to miss:

1. The Perfect Demographic For Growth: India is the fastest growing large economy on the planet. Its rapidly increasing population is predicted to overtake China by 2022, and become the largest in the world.

2. Exceptional Consumer Led Demand: A large part of the 1.34 billion people are increasingly sophisticated, technologically literate and wealthy.

3. Supportive Fiscal Regime: The government has been making radical changes to create a more business friendly environment. There is now a uniform tax regime (GST) across all 29 states of India, and introducing an affordable housing programme with additional tax breaks.

4. Dynamic Real Estate Market: India is experiencing an unprecedented demand for both domestic housing and commercial property. Real Estate investment in India’s six major cities doubled in the first half of 2017.

5. Vibrant Private Equity Sector: 2017 was the busiest year for more than a decade for private equity deals in India, with total investments of £16.84 billion.

6. Unprecedented Infrastructure Spending: There is a public infrastructure programme of moving scale. This includes 83,677 km of new road being built over the next 5 years (The UK’s motorway network is a little over 3,000 km).

7. Regulatory Certainty: The government has been decisive. Demonetisation has removed much of the ‘black economy’ and over 6,000 companies suspected of improper activities have been closed. Arbitration and court procedures have been overhauled and sped up.

8. Global Trading Hub: Major international companies, such as Virgin and Amazon are now moving to India to invest in and participate in the expansion.

9. World Leading Computer Technology: India is now recognised globally as a technology powerhouse, with an increasingly IT literate population.

10. Stable Federal Structure: India’s federal structure offers highly effective risk management, that helps protect the economy from any unpredictable events. Which means that investors are more than ever protected against localised market risk.

For these reasons and more, India is now one of the most exciting places to invest. At Red Ribbon, we use our expertise and resources to identify the investment opportunities that have the potential of delivering superior returns to our investors.

Nobody understands that potential for growth better than Red Ribbon Asset Management, which has placed India at the very heart of its investment strategies since the company was founded more than a decade ago. With an unrivalled knowledge of market conditions on the subcontinent, Red Ribbon offers a unique opportunity to share in that vast potential. India is more than just an exciting investment opportunity, it’s also a driver to global economic growth and that’s why Red Ribbon has long held the view that no investment portfolio can be considered properly balanced unless at least 10% of its holdings are deployed in Growth Markets and, of course, for us that has always meant India in particular.

 

At Red Ribbon we are very proud to have been playing our own part in India’s economic resurgence over the last decade, investing in just the kind of projects that are at the heart of the interlocking triangle of growth mentioned in the article: everything from the modular construction technologies now being developed by Modulex so as to deliver affordable housing at the pace demanded by the subcontinent’s urban expansion, through to innovative sustainable energy infrastructure investment. And to see India now firmly established at its place on the economic top table, uniquely well placed to move further forward still is, of course, a particular source of pride for us.

 

 

 

 

 

We look forward to continuing to play our part in India’s future, participating to the utmost in the opportunities the subcontinent’s explosive growth has to offer and at the same time providing above market rate returns from our investors in what I am convinced will continue to be one of the world’s most exciting markets for many 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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