“India Time. Wow it is hard to believe the numbers.”

By John Stackhouse, Senior Vice President RBC.

India has long been lampooned as the land of endless potential, with a lot of emphasis on endless.

 

That may be changing, with potential becoming reality.

 

As the world convulses from NAFTA turmoil, trade tensions between the U.S. and China and the slow bleed of Europe’s economic union, India is shining. Its economy grew 7.7% in the most recent quarter, while investment over the last four years totalled $222 billion, more than any other country.

 

Invest India, the country’s main investment agency, believes the economy will reach $7 trillion by 2025, when its population is projected to reach 1.5 billion, surpassing China.

 

“It’s not a question of whether India is an opportunity. India is the opportunity of our lifetime,” says Natarajan Chandrasekaran, chairman of Tata Sons, India’s legendary conglomerate that controls nearly 50 companies worth a combined $180 billion.

 

Chandrasekaran was in Toronto this week with a group of Indian business leaders to explore trade and investment with Canada.

 

Here’s where they see opportunities:

Transportation

• Indian air traffic is growing 20–25% a year
• the country expects to buy one new aircraft a week for the next 20 years
• it’s building 40 kilometres of roads a day, and has plans for 800 new express highways by 2025
• it expects to build 800 new rail stations and 10,000 kilometres of high speed rail, plus 1,000 kilometres of metro rails in cities

Mobile

• Cell phone penetration grew from 18% to 93% in one decade, from 2007–2018
• India has 1.19 billion mobile phones, for 1.2 billion people
• Tata expects the country to have 700 million smart phones by 2020

Digital

• 481 million Indians are connected to the Internet, behind only China
• every second, three more Indians access the Internet for the first time, with two-thirds of them in villages
• Internet penetration rose from 4% to 35% in one decade

Real estate

• the Modi government has awarded large tax concessions to companies building affordable housing
• big players like Brookfield are expanding in commercial real estate, including IT parks

Financial services

• 318 million bank accounts were added in the last four years
• the Ontario municipal pension group OMERS sees financial services growing 20% a year for the next decade
• Deepak Parekh, chair of Housing Development Finance Corp., pointed out that consumer credit represents only 13% of India’s GDP, compared to 20% in China

Startups

• India is second in the world in terms of startups, behind the U.S. And most of those firms are now located in regional centres like Jaipur and Indore rather than the megacities like Mumbai
• Vikas Swarup, India’s High Commissioner to Canada, said Bangalore is now the world’s fourth largest tech hub
• the country’s 10,000 engineering institutes produce more engineers every year than China and the U.S. combined

So where’s Canada in the India story? Still lagging other Western countries.

 

India took in less than one per cent of Canada’s exports in 2017, although overall Canadian investment has grown in just four years from $4.3 billion to $23 billion, driven largely by pension funds and institutional investors like Fairfax and Brookfield.

 

Canadian High Commissioner Nadir Patel said there are about 1,000 Canadian companies now active in India, with a growing interest in renewable energy, food processing, information technology and construction.