23.10 Liontrust Views Autumn 2023 Literature (Single) - Flipbook - Page 12
India
AN
INVESTMENT
DESTINATION?
India has been flying high in recent months with the news of its first successful moon landing, followed
in rapid succession by the country launching a space mission to the sun. In September, prime minister
Narendra Modi hosted the G20 summit, demonstrating the region’s increasing geopolitical influence.
But could it also offer exciting opportunities for investors.
The case for India
Earlier this year, India overtook China
to become the country with the largest
population in the world at around 1.4 billion
people, and its young demographic has
positive implications for growth. According
to a report by EY, over the next decade,
nearly 25% of the global workforce will
come from India.
Japan and Germany. Currently, it is the world’s
seventh largest economy in absolute terms.
The International Monetary Fund recently
revised its GDP growth forecast for India to
6.1% for 2023, up from 5.9%, because
of stronger domestic investment. And in the
longer term, research by EY1 suggests that
India could become the world’s third largest
economy as early as 2028, overtaking both
India’s services market also plays a key
role in exports and as the country continues
to build on its reputation for being a
technology and innovation hub, there is
likely to be significant potential for growth.
Reforms introduced by prime minister Modi
with the aim of making it easier to do
1
2
Rising incomes are helping to create an
ever-growing middle class and leading to
higher demand for products and services
from clothes to cars, to financial services
and healthcare, pushing domestic stocks to
new highs.
India – towards becoming the third largest economy in the world – EY
India incorporates green bonds into its climate finance strategy – World Bank
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LIONTRUST VIEWS – AUTUMN
business in the country – for both domestic
and international investment – have
significantly cut levels of bureaucracy and
made India a more attractive destination in
the eyes of many.
As India’s economic growth continues, so too
does its demand for energy and the country
is taking notable steps towards renewable
energy generation, in particular with solar
power. It has committed to reaching net
zero by 2070 and as of February 2023,
the Indian government had issued $21
billion of sovereign green bonds, more than
any other emerging market bar China.2
Should investors be looking towards India?
