Economic slowdown doesn’t dampen India’s appeal in Davos | Real Time Headlines

This report comes from this week’s CNBC “Inside India” newsletter, which brings you timely, insightful news and market commentary on the emerging powerhouse and the big players behind its meteoric rise. Like what you see? You can subscribe here.

“Indian people and young people are now Be prepared to contribute to the creation of the economy It will reach $5 trillion by 2025,” he outlined in a speech at the 2018 World Economic Forum (WEF).

Modi added: “Not only that, when innovation and entrepreneurship… help individuals transform from job seekers to job providers, then one can imagine the number of avenues that will be opened up for their country and for your business.”

To be fair, achieving this has proven difficult.

India’s economy is expected to $4.27 trillion, according to the International Monetary Fund This year, it is $0.73 trillion short of Modi’s target.

it is economic slowdown Questions have been raised about the country’s lofty growth targets. Market observers believe that India is currently in the midst of a cyclical slowdown.

But interestingly, the Indian story and its growth potential continue to attract the attention of investors in India, Davos and beyond.

India is one of them top five regions Global CEOs surveyed by consultancy PwC want to invest in the next 12 months. Among 4,700 CEOs from 109 countries, other regions that made the top five included the United States, United Kingdom, Germany and mainland China.

Optimism about India is spreading amid ongoing discussions in Davos.

In an interview with CNBC during this year’s World Economic Forum, Khaldoon Al Mubarak, Managing Director and Group CEO, Mubadala Investment Company Describing India as “a very, very interesting country (and) a very interesting market”.

In his view, one of the most salient indicators of India’s potential is its large and young population. Mubarak said there are approximately 480 million Indians under the age of 18, which is more than the combined population of the United States, Europe, the Middle East and South America.

“We have been investing in India for many years… We continue to focus on building our portfolio in India and really getting into the wave that has started,” he said.

He added that this cycle “is, in my opinion, going to continue.”

Mubadala’s investments in India include Tata Power Renewables, a unit of the Tata Group; Reliance Industries-Supported by tech giant Jio Platforms.

Prosus is another investment firm looking to cash in on India’s growth potential, particularly in the country’s technology sector.

“You see the impact of technology in India… they say ‘we are ready for the next step’,” the company’s CEO Fabricio Bloisi told CNBC on the sidelines of the summit.

“Prosus is ready to invest more, more in India. We have invested about $8 billion in India over the past few years, and we will invest more,” he added.

Indian startups that Prosus has invested in include food delivery company Swiggy, edtech company BYJU’s, agritech company Dehaat and e-commerce platform Meesho.

Vigorously develop science and technology

Interest in India – particularly its opportunities in the tech and startup sectors – is consistent with the government’s broader focus on growing the sector.

One of the key priorities for the Indian delegation to Davos this year is to deepen its foothold in the semiconductor industry through government incentives and targets.

Minister for Railways, IT and Information Broadcasting Ashwini Vaishnaw said this includes exploring the development of its own graphics processing units (GPUs) in the next three to five years. told CNBC-TV18 on the sidelines of a WEF meeting.

Other projects he revealed include India’s plans to develop 25 indigenous chipsets Designed and manufactured domestically. It expects to launch the first wafer in September and the first fab in 2026.

Vaishnaw also outlined the government’s goal to provide underlying computing power through 1,000 GPUs, especially for the benefit of startups that lack access.

This is part of the government’s focus this year on developing talent and using data to create powerful datasets to train artificial intelligence models, he added.

Vishno is reportedly leading India’s largest delegation to Davos this year, consisting of representatives from eight states: Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Maharashtra, West Bengal and Uttar Pradesh, with representatives from each state from India. competing for investment measures they are about to take.

For example, Andhra Pradesh Chief Minister Chandrababu Naidu Report reportedly showcases state’s business-friendly policies Hoping to attract multinational companies like Unilever, PepsiGoogle Cloud and AstraZeneca.

Meanwhile, its neighboring state Telangana has showcased its expertise in electric vehicles, pharmaceuticals and semiconductors. Maharashtra reportedly calls itself elsewhere indian industrial powerhouse.

The heavy presence of Indian officials in Davos may be an acknowledgment of the fact that businesses, especially those that are only a few years old, need more capital than they can raise at home.

Foreign investment into the country is “drying up” due to economic policy uncertainty and geopolitical risks, said Dhiraj Neem, currency strategist and economist at ANZ Bank.

One way forward, he suggested, is for the Indian government to “increase confidence by reducing political and regulatory costs and making it easier to do business in India.”

“Even if global variables cannot be controlled, India can do a lot. India plans to become a developed country in 2047, so we need stronger growth than the 6-7% we are used to. And growth will come through increased investment and a better workforce Productivity and technical capabilities to achieve this,” Nim added.

How India plans to continue growing at a sustainable pace while providing jobs and increasing productivity is a top concern for the Indian government. In Davos, Mr Ashwini Vaishnaw, India’s Minister of Railways, Electronics and Information Broadcasting, sat down for a discussion with a group of global executives, investors and Indian entrepreneurs. Brunswick Group and CNBC hosted a breakfast on the sidelines of the World Economic Forum where executives and investors could ask questions of the minister and discuss India’s investment climate.

India may lower disinvestment target for FY25. The government is seeking Cut disinvestment and asset monetization targets According to the Economic Times, citing people familiar with the matter, spending will be reduced by 40% in the 2024-2025 fiscal year, from 500 billion rupees to less than 300 billion rupees ($3.47 billion). Regulatory hurdles and valuation difficulties have proven to be obstacles, but Prime Minister Narendra Modi’s government has still sold more stakes in state-owned companies than previous administrations.

The Quad met and reaffirmed their partnership. Foreign ministers from the group, which includes the United States, Australia, India and Japan, met on Tuesday to stress the importance of maintaining a free Indo-Pacific, according to a joint statement issued after talks in Washington. The meeting, chaired by U.S. Secretary of State Marco Rubio on his first day in office, was intended to demonstrate: Confronting China is a top priority for the Trump administrationanalysts said.

Oil prices in India may rise. US imposed New sanctions on Russian oil January 10th. With India importing about 40% of its oil from Russia, New Delhi may face a sudden supply crunch, according to trade intelligence firm Kpler. Supplies from India may be disrupted Up to 500,000 barrels per dayViktor Kurilov, senior analyst at Rystad Energy, told CNBC. To mitigate potential oil shocks, Indian importers are looking to source oil from Middle Eastern suppliers.

Indian stocks have been mixed this week. this nifty 50 The index fell 0.03% this week to close at 23,205.35 points.

India’s benchmark 10-year government bond yield remained flat at 6.78%

Kumar Rakesh, India analyst at BNP Paribas, said on CNBC this week Optimism about Indian auto industry. Rakesh said India’s exports of passenger cars and motorcycles have been growing at a fairly strong pace in recent years, especially in markets in Africa, Latin America, the Middle East and Southeast Asia. Additionally, Indian automakers are able to enjoy greater profitability as their domestic production costs are among the lowest in the world.

Meanwhile, HSBC Global Private Banking and Wealth Management Americas Chief Information Officer Jose Rasco admitted that the Indian market is not cheap, but that is because investors “pay for qualitySome of the features that attract investors to India are its young and diversified economy, good legal system, and rising productivity in recent years.