India and the Brexit PM

As the British Prime Minister concludes her Brexit negotiations, one wonders what it means for India and the UK. Never before has any country outside the US had as many of its corporate leaders in the Forbes Rich List top 10 as India recently had. Not even Japan in its heyday or China matched the feat. To make the case for opportunities in India would seem self-evident then. After all, if a nation’s own people, who know the country the best, can make fortunes to compete with the world’s largest economy, then surely outside investors too can do very well there. Yet, misperception still obstructs many investment decisions concerning India. Let’s eradicate them.

Meeting a California Silicon Valley billionaire who has re-emigrated back to India is perhaps one of the more striking proofs of India’s potential. These, the most successful of Indians, who moved to the US in the 1960s from an opportunity-shorn India, return today with their millionaire colleagues, to capture the types of opportunities few, if any places on earth can match. After, all, no other major capitalist economy will even come close to matching India’s growth for decades.

Imagine a business person with a time machine. They would probably choose to go back to the beginning of last century to the US to make their fortune – the time of Rockefeller and Getty.

Consider during that century, the Dow advanced from 66 to 11,497. This gain, though it appears huge, shrinks to 5.3% when compounded annually. And that nevertheless was the American century – the century when the US became a super power. Consider that that growth rate transformed a backward nation from the horse and carriage to one which freely sent man to the moon. Yet India today exceeds and is projected to exceed for our working life times that return-rate of 5%. The baton of Rockefeller and Getty is truly carried by Ambani and Tata.

If your investment options were binary: US, the world’s largest economy, or India, think now about this century. For investors to merely match that 5.3% market-value gain, the Dow – just 9 years ago at 10,000 – would need to close at about 2,000,000 on December 31, 2099. It had racked up none of the 1,990,000 Dow points the market needed to travel in this hundred years to equal the 5.3% of the last.

Whereas, India, with the real economy targeting 8% for the foreseeable future is far more likely to provide the types of returns to match the transformation the United States had since 1900. Where would you invest?

What is sadly striking is how few smaller British companies know about the Indian opportunities. Even more UK companies should reach out to the UK’s Department for International Trade. Was it like this in the late 1500s before the East India Company was established?

With Brexit, we have to make even more of a connection between our Government bodies and our businesses to leverage the size and scale of the British presence in India – just as they did in the past!

Alpesh Patel

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