India’s potential in Investments

Investing in India is the best option for the following decades. source:

Lately, India is attracting a lot of FDI and is predicted to be one of the biggest markets in future. According to data released by the World Bank, it says that the average age in India is 28 whereas in developed countries like China, United States, Canada and Japan it is 37, 38, 39 and 48. Japan is the oldest nation in the world and hence there is a huge number of people in late 40’s and early 50’s in the population composition. Japan is facing stagnation in the economy. There is no significant increase in growth seen in the recent years. The markets will remain the same and there will not be much increase in its potential. Due to their one-child policy China’s population has 53% male and 47% female. In the coming years the population will increase and then drastically fall, just like Japan 20 years ago.

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40 to 60 years ago there was more economic boom in the world as all the developed countries were still developing and the demographics were really good for investments. But now it has changed and expenditure on infrastructure does not give the same returns as it did when the first bridge or flyover was built.  In India the returns from spending on infrastructure will be more as the demographics show that India has a good potential for investments for the next 30 to 40 years. It is still developing and the average age of 28 adds on to its potential to have a boom in its economic growth and returns. But India faces the problem of twin deficits due to its inefficient management of import and exports. India tends to import more than it exports in both trade and investments. The Indian currency has been falling by 5 per cent every year for the past 30 years. This does impact the investors in India. But the potential and future boons it will give to intelligent investments rule them all out. The fertility rate in India is also high at 2.5 compared to the 1.8 in other countries which makes the nation more favorable towards attaining a staggering economic growth in future.

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Apple’s decision to set up manufacturing unit in India proves India’s potential in investments in the years to come.

The demographics of other countries like Russia and Brazil make only risk-adjusted returns which does not attract investors as there is more potential in countries like India with much less risk and government support. India is becoming the strongest manufacturing country. Apple’s decision to start their manufacturing unit in India shows us just that. India holds about 1 percent of the world market and this will grow in the decades to come. The currency has not seen a stable period yet but in future this will tend to change.