( FORMER CHIEF ECONOMIST, BENGAL CHAMBER OF COMMERCE AND INDUSTRY)
KOLKATA, 23 MAY 2023:
As an Economist, if I have to answer this question I would answer : YES.
You may question – why are you saying so – I would put it this way.
- The global expectation is that India, in another 5 years, will turn into 3rd. largest economy in the world.
- Ease of doing business in India is progressively increasing
- India’s macroeconomic management of the economy is cautiously driven and at the sametime growth oriented.
- India is increasingly driven by smart, qualified technocrats with an open mind and ready to adopt new technology.
- India is booming with Start-up Entrepreneurs ready to take risks and launch new ventures.
- India is now a transformative economy. Large chunk of investment in infrastructure, in digital platforms is happening.
All necessary and sufficient conditions for a modern economy are being initiated and hence – investors’ perspective is continuously turning positive. In the next 10 to 20 years foreign investors will flock to India and we will not have major scarcity of capital.
The next question you may ask – how foreign investors will play the game?
Well, my guess is initially they will invest in private equity and not in credit or infrastructure. Private equity is the sweet spot for foreign investors.
In terms of sectors, where foreign investors will venture – most likely are :- financial services, healthcare, followed by consumer products.
Gradually, foreign capital will plow in industrial and manufacturing – in two big buckets – India for Indian businesses and India for the global business.
The focus of the foreign investors would be where India has a competitive advantage like IT and Pharmaceuticals .
Foreign investors’ value creating playbook will concentrate on minority deals with bootstrapped companies. This is because minority deals are controllable deals which allows wide flexibility around capital structure, management team selection and ability to do M&A or exit.
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