By Bhim D Asdhir
India’s meteoric rise to global prominence is inevitable. Perhaps, US President Barack Obama, writing in Time Magazine on April 16, puts India’s and Prime Minister rendra Modi’s rise to prominence best: “Today, he’s the leader of the world’s largest democracy, and his life story - from poverty to prime minister - reflects the dymism and potential of India’s rise.”
True enough, both Modi’s and India’s rise to prominence on the global scene has been remarkable. In less than a year since becoming prime minister in May 2014, Modi has put India on the path to becoming a global powerhouse. And Modi has made it to Time’s list of the Top 100 Most Influential People.
Christine Lagarde, the maging director of the Intertiol Monetary Fund, in an address at Lady Shri Ram College in New Delhi on March 16, highlighted India’s rise, saying: “Just as many countries around the world are grappling with low growth, India has been marching in the opposite direction. This year already, India’s growth rate is expected to exceed that of Chi, and by 2030, it is will overtake Chi as the most populous country in the world.”
In fact, the IMF has upgraded India’s growth forecast twice in the past year, most recently in April, from 7.2 percent in 2014 to 7.5 percent in calendar year 2015. The global watchdog said growth will come from policy reforms, a consequent pickup in investment and lower oil prices. The government, on the other hand, believes that GDP growth will accelerate by eight percent to 8.5 percent in fiscal 2015-16 that began on April 1.
In fact, some alysts are forecasting double-digit growth rates in the near future, fuelled by government reforms which are proving to be a huge driver among foreign investors who are pumping record levels of money into India.
Last year, foreign private and institutiol investments into India reached record levels, with a dramatic increase expected in 2015. Investors from several major developed countries, including the US, Chi, Japan, France, Germany and Cada have so far committed massive investments in India, largely due to Modi’s influence.
During his recent visit to Cada, the first by an Indian prime minister since 1973, the two countries completed memoranda of understanding in a range of areas, including civil aviation, rail regulation, education and skills development, space cooperation, and projects focussed on materl, newborn and child health and social security.
Several commercial agreements between Cadian and Indian companies, valued at some $1.6 billion, were also announced in sectors such as aerospace and defence, education, energy, mining, infrastructure, sustaible technologies, and information and communications technology.
One of the more important commercial agreements involves the Saskatchewan-based Cameco, which will supply India with over seven million pounds of uranium over the next five years as part of the Cada-India Nuclear Cooperation Agreement. Modi had earlier signed agreements with France to build nuclear reactors, aimed at fulfilling his plans to make India energy sufficient.
As India takes off, it represents more than an exciting investment opportunity for Cadian investors. Prime Minister Stephen Harper sees 1.2 million Indian voters in Cada who love Modi, which could be a big boost for him in the next elections. Incidentally, Harper was actively involved in cultural events in Toronto and Vancouver held in honour of Modi - which were attended by “sellout” crowds of Indo-Cadians.
Modi’s visit to Cada will also increase awareness among investors about the opportunities available in India. While India is probably the most over-weighted country among foreign institutiol investors, Cadians are now beginning to warm up to investing in the country. Last year, the Excel India Fund was the best performing mutual in Cada out of more than 4,000 such funds, according to Morningstar Cada. This indicates that investors need to place greater credence in India as an investment opportunity.
India has become a priority in Cada’s Global Markets Action Plan, which seeks to increase the number of Cadian companies exporting abroad. During Modi’s visit, Harper stated that “it is exciting to see the commercial deals being signed between Cadian and Indian firms” that “will generate jobs and economic growth in both countries”.
He also indicated that he and Modi are “busy working to advance bilateral agreements that will further increase two-way trade and investment flows” aimed at leveraging the enormous untapped trade potential between the two countries.
Evidently, the relationship between Cada and India will only grow stronger as India takes off. Modi recognizes that the government cannot develop India on its own and is getting the private sector more involved. He has also relaxed foreign institutiol and foreign direct investment restrictions and opened the doors to foreign investors, which will drive the equity markets higher to the benefit of investors.
For now, India can only keep rising, benefitting Cadian investors. (IANS)
(Bhim Asdhir is President and CEO of Excel Funds in Cada. The views expressed are persol. He can be contacted at firstname.lastname@example.org)