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Tag: India

  • Dinesh Dhamija: India’s 10 year reckoning

    Dinesh Dhamija

     

    Since his election as Indian Prime Minister in 2013, Narendra Modi set out a vision for his country to become a fully developed economy by 2047, the centenary of its foundation.

    Could India finally cast off its colonial burdens and achieve its undoubted potential?

    We are now a third of the way through the journey from Modi’s arrival until 2047 and the Indian population is about to cast its votes in a General Election.

    Here’s how the main economic indicators have shifted during the first decade of his tenure:

    From 2014 to 2022, India’s GDP grew by an average of 5.6 per cent in compound annual growth (CAGR) terms, compared with a CAGR of 3.8 per cent on average for 14 other large developing economies such as Brazil and Mexico.

    The percentage of Indians living in extreme poverty (earning less than $2.15 per day) has fallen from 18.7 per cent in 2015 to 12 per cent in 2021, across both urban and rural populations. Economic analysts attribute this to welfare schemes and the Aadhaar digital ID system, which has helped to target payments to the needy and cut out middlemen.

    Indians now make digital transactions worth Rs3,355 trillion per year, a 70 per cent increase on the Rs1,962 trillion in 2017-2018, much of it conducted via locally made smartphones, which 60 per cent of the population own. India’s digital transformation has helped it become the ‘back office to the world’, particularly centred on the cities of Bengaluru and Hyderabad.

    India’s middle class – defined as households with an annual income between $6,700 and $40,000 – has risen from 300 million in 2014 to 520 million today, while those classed as wealthy, earning above $40,000 pa, now number 90 million, up from 30 million in 2014. These changes have opened up markets for a huge diversity of consumer goods, for national and international travel, for investment and business development. They are an extremely positive sign for the future of the country.

    Infrastructure development is another big success story: more than 10,000km of roads have been constructed each year since 2018 and 1.7 per cent of GDP is devoted to transport investment, compared with 0.4 per cent of GDP in 2014. Of course, not everything is perfect. India’s unemployment figures are concerning: they exceeded 10 per cent in October 2023 and are worryingly high among young people and women. Despite government encouragement, the female labour force participation rate fell between 2014 and 2022 from 25 per cent to 24 per cent, lower than Bangladesh, Sri Lanka or Pakistan.

    Nevertheless, if the next 20 years see as much progress and economic growth as the past 10, there is every chance that Modi’s vision for the country will be realised.

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book, The Indian Century, will be out soon.

     

  • India Seeks Energy Independence by 2047

    Dinesh Dhamija

    To coincide with the centenary of its independence from Britain in 2047, India’s leadership has announced a new ambition: energy independence.

    The ruling BJP – widely expected to win the current general election – pledged that independence will be achieved “through a mix of electric mobility, network of charging stations, renewable energy production and improving energy efficiency,” while reducing petroleum imports.

    This ambitious target builds on the drive towards renewable energy generation that Prime Minister Narendra Modi established from the earliest days of his administration, starting in 2013 (and even before, when he was Chief Minister of Gujarat).

    As I outline in my book The Indian Century, Modi’s embrace of solar energy has been transformative for India, harnessing a source of power that the country has in greater abundance than almost anywhere else on earth. Here’s a brief excerpt:

    “Added together, the total solar energy which pours down upon India from its annual 300 cloudless sunny days is 5,000 trillion (5 quadrillion) kWh, or around 7 kWh per square meter per day. Capturing just a tiny fraction of this solar energy could meet all of India’s energy needs. In fact, a year’s worth of Indian sun would produce more energy than the country’s entire fossil fuel reserves.”

    To bring this potential energy boon to fruition will take years of infrastructure development, investing in a nationwide smart grid, support for the transition to EV manufacturing and a national charger network, further subsidies for rooftop solar systems (such as the scheme launched in February this year) and encouragement for the large-scale wind farms, solar parks and ‘Green Energy Corridor project’ that are already in development. The BJP has also promised to invest in green hydrogen production, which as a green hydrogen businessman is music to my ears.

    Politically, energy independence is a smart move. A resurgent India will have more credibility on the global stage if it is not in hock to Russia for discounted fuel when many other nations are boycotting the country.

    Environmentally, it makes complete sense to decarbonize wherever possible, allowing the government to demonstrate to its own people that climate change and clean air is a priority. Extreme heat and pollution are already threatening to make parts of India uninhabitable.

    The benefits of renewable power will become ever more obvious, as economies of scale, technologies advance and infrastructure connections improve. The BJP has promised that 10 million Indian households will receive up to 300 units of free electricity per month, under a new solar scheme, to improve the standard of living for the country’s poorest. If India can deliver independence from poverty for its people by 2047, that would be an even greater achievement.

     

    Dinesh Dhamija founded, built and sold online travel agency ebookers.com, before serving as a Member of the European Parliament. Since then, he has created the largest solar PV and hydrogen businesses in Romania. Dinesh’s latest book is The Indian Century – buy it from Amazon at https://www.amazon.co.uk/dp/1738441407/

     

     

  • India Heads Global Growth League

    Dinesh Dhamija

    Cementing its place at the peak of global economic performance, India appeared in Franklin Templeton’s latest survey as the least likely of all major countries to suffer recession in 2024, with a zero per cent chance.

    By contrast, Germany seems almost certain to plunge into recession, with a 73 per cent likelihood, followed by Italy on 63 per cent and the UK on 53 per cent. Canada (50 per cent) and the United States (45 per cent) are on a knife edge, while Australia (40 per cent), France (35 per cent) and South Africa (30 per cent) are all in areas of concern.

    The emerging economies of China (15 per cent), Brazil (10 per cent) and Indonesia (2 per cent) fare best in this analysis, other than India, with Japan and South Korea (both 15 per cent) forming an Asian bloc of positive prospects. Nothing in life is ever guaranteed, however, so despite such high confidence, some Indian
    commentators are more cautious. “Recession risks may reappear in 2024 due to…rising food and energy prices amidst lingering geopolitical tensions,” wrote Dr Kembai Srinivasa Rao in the Times of India. He nevertheless predicts growth of 7 per cent for 2024 and 6.5 per cent in 2025, far above that of most other economies.
    What worries many economists in India, as in the rest of the world, is supply chain disruption from the Ukraine and Gaza conflicts, as we have seen in the Gulf of Aden, with attacks on commercial shipping. An escalation of the situation in Taiwan is also on economists’ radar, adding to the drumbeat of negativity against China on security and trade.

    As the Times newspaper pointed out in a recent editorial, India’s elections later this month promise to deliver a new mandate for Narendra Modi, giving him the freedom to act more decisively in foreign and economic affairs. The Times predicted that he would use this freedom to cement ties with the United States and Europe, while reducing dependency upon Russian energy and countering Chinese influence in Asia. This may be wishful thinking, but it allies with the thesis in my latest book ‘The Indian Century’ that India has a large and growing role to play in global affairs, just as China’s economic star is fading, Russia has become an international pariah and Europe is suffering a demographic timebomb of an ageing population and stagnant growth.

    By 2028, India is expected to have more than 600,000 High Net Worth Individuals, giving it the fourth largest private wealth market in the world. The value of the country’s stock market, meanwhile, overtook Hong Kong’s in January 2024 to become the world’s fourth-largest, worth more than $4 trillion. By the end of the decade, that figure is predicted to reach $10 trillion. There are always doubts about economic forecasts, but in the case of India, right now, there are remarkably few.

    Dinesh Dhamija founded, built and sold online travel agency ebookers.com, before serving as a Member of the European Parliament. Since then, he has created the largest solar PV and hydrogen businesses in Romania. Dinesh’s latest book is The Indian Century – buy it from
    Amazon at https://www.amazon.co.uk/dp/1738441407/

  • Dinesh Dhamija: Sunny Side Up

    Dinesh Dhamija

     

    Ten million Indian households stand to benefit from a new solar power project, announced this week.

    ‘PM Surya Ghar: Muft Bijli Yojana’ – which translates as ‘The PM’s Sun House: Free Electricity Scheme’ – will offer 300 units of electricity per month to households who install solar panels on their rooftops.

    Prime Minister Narendra Modi has pledged Rs 750 billion ($9 billion) to fund the plan, with subsidies going directly to people’s bank accounts. A National Online Portal will administer the scheme, as part of a drive to switch India from hydrocarbons to renewable power.

    Besides the environmental benefits, this move promises to reduce household power bills, increase their income and generate employment. These are all laudable ambitions and very much in line with Modi’s thinking over many years. He was an early pioneer of solar investment when Chief Minister in Gujarat, attracted millions of dollars to new facilities.

    As Prime Minister, he has continued to push for businesses and individuals to opt for solar energy where possible, with novel developments including lakes covered with solar panels, taking advantage of natural cooling properties, and sports stadiums powered by panels on their exteriors. The other great motivator for solar energy is security: both in supply and in geopolitical terms. While India imports 70% of its energy needs, the more that the country can be self-reliant, the better.

    As a leader of the Global South movement, India’s move towards energy independence is a great example. Indeed, as one of the hottest and sunniest countries in the world, it could eventually become an exporter of solar energy, rather than an importer of hydrocarbons. In the medium term, the government has set a target of 500GW of energy generation to come from non-carbon sources, including 450GW from wind and solar, by 2030. Just as the country is massively upgrading its roads, rail, ports and airports, a similar effort is underway to boost its energy infrastructure.

    I would argue that this is just as important, if not more so. You can’t grow an economy if you’re lacking power. And there remain plenty of regions of India where power cuts are a regular part of life. As India’s solar energy proponents might say: “the future’s sunny”.

     

    Dinesh Dhamija is a solar energy entrepreneur, with a major project in Romania. He founded, built and sold online travel agency ebookers.com, before serving as a Member of the European Parliament. Dinesh’s latest book, The Indian Century, has just been published.

     

  • India’s New Wave of IPOs

    Dinesh Dhamija

     

    From just $17 million raised by Indian IPOs in January 2023, this year they totalled $678 million – a 40-fold increase – according to a report in the Financial Times.

    A further 66 companies are expected to list in the coming months, as India’s Sensex stock index rose 20 per cent in the past 12 months and both domestic and international investors remain hungry for more. Standout companies proposing to list include Ola Electric and fintech group MobiKwik.

    What accounts for this huge increase? It’s partly the ongoing transfer from Chinese markets, as political tensions have risen, and a series of Chinese stocks have crashed – notably the property giant Evergrande. It’s partly a new approach among Indian businesses, to welcome outside investment and to recognise the advantages of listings. But it’s also the mood of growth and possibility in the Indian economy more generally.

    On 1 February, the government announced a new infrastructure investment programme totalling $134 billion to improve India’s railways, airports and road networks, up by 11 per cent on previous spending. Finance minister Nirmala Sitharaman said that the decision would “have a large multiplier impact on growth and investment.”

    This ability to trade more efficiently and quickly, through better transport links, is bound to have a knock-on effect on the wider business environment.

    India’s newfound love of mobile transactions has turned a new generation into potential stock investors, widening participation in the equity markets to 140 million trading accounts. And the sustained repetition of positive economic news about India has woken international fund managers to the country’s potential. Foreign investors bought $20 billion worth of Indian stocks in 2023, versus $8 billion worth of Chinese stocks. The economy as a whole is expected to grow by 7 per cent this year.

    Not everything is rosy. Fintech start-up Paytm, which listed with great fanfare in 2021, has struggled recently after the Reserve Bank of India forbade it from taking deposits and offering banking services. Its shares now trade at 70 per cent below the IPO price. Some experts fear that some Indian stocks are overvalued, after months of bullish markets.

    Doubtless there will be fluctuations and some IPOs will under-perform, but that’s true wherever you go.

    The longer-term story is that India is becoming an investable location, and its companies are rapidly learning what it means to operate in the global financial system. The outlook is overwhelmingly positive.

     

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book, The Indian Century, is published in February.

     

  • Dinesh Dhamija: Storm in a Beauty Spot

    Dinesh Dhamija

    It was hardly the worst provocation in the world: Indian Prime Minister Narendra Modi sitting in a chair on a sandy beach, saying how much he enjoyed his morning stroll. Yet within moments, it had sparked an international incident recalling the Bay of Pigs.

    To summarise: some Maldivian politicians took exception to Modi’s tourist snap and made rude comments about him and about Indians in general. The Maldives’ recently elected president, Mohamed Muizzu, suspended them. Indian celebrities pledged to boycott the Maldives and one major travel agent stopped booking trips to the archipelago. The chances are that the spat will blow over as quickly as a mid-afternoon tropical shower, but it illustrates a few interesting trends.

    The first is that Indian Ocean countries feel they need to push back against the country’s growing regional influence. For the Maldives, this means playing India off against China, with new president Muizzu openly campaigning on an anti-India ticket and agitating for greater independence from its huge northern neighbour. At the same time, since 25 per cent of the Maldives’ economy ($3 billion) relies upon tourism, and since Indians make up the largest part of that, he can’t afford to alienate their visitors. Hence slapping down his own party members.

    Modi, for his part, is an unashamed nationalist and will always promote Indian assets, including tourism destinations, whenever possible. And why not? The fact that the Lakshadweep islands receive just 10,000 visitors a year compared with 1.7 million to the Maldives makes the debate symbolic rather than economic. The overall Indian tourism industry is forecast to exceed $23 billion in 2024 and reach almost $35 billion within five years. With this level of growth, the Maldives can look forward to boom times for years to come, whether or not the Lakshadweep islands throw up a few five-star resorts. Indians venturing overseas enjoy Mauritius, Thailand and Dubai, but the Maldives is closer, more relaxing and the food is typically fantastic.

    The geopolitical trend is more serious and concerning, since China has become more belligerent, in the South China Sea and elsewhere, challenging India on its own borders and in relation to Pakistan. If President Muizzu were to invite the Chinese military into the Maldives, that could change the whole diplomatic balance of the Indian Ocean. Visitors to the Maldives are struck by the tranquillity and beauty of the islands, by the fabulous marine life which swirls beneath resort verandas and the gentle, welcoming nature of the local population. Somehow, these paradise-like islands also manage to harbour simmering tensions which occasionally erupt into violence, thanks to high unemployment and a widespread drugs culture. Hindu-Muslim divisions have widened in recent years, giving some Maldivians a reason to oppose Indian influence.

     

    Portraits of Dinesh Dhamija for Finito. 7.6.2023 Photographer Sam Pearce

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book, The Indian Century, will be out soon.

     

  • India’s Prospects for 2024

    Dinesh Dhamija

    We’re almost a quarter through the 21st century and the predictions of Jeff Bezos and others that this would be “India’s Century” are well on their way to fruition.

    What should we be looking out for in 2024, as the country exerts its ever more powerful economic and political muscles? Here are my top seven predictions:

    Major announcements from global corporates

    We’ve seen global manufacturers like Apple increase their operations in India over recent years. I predict there will be an acceleration of these deals: Apple itself wants to make 25 per cent of its iPhones in India by 2025, so watch out for multi-billion-dollar investments.

     

    India takes diplomatic centre stage

    Russia’s invasion of Ukraine, the stand-off between China and the United States, conflict in the Middle East… these are all disputes between polarised adversaries which a calm, neutral moderator can help to resolve. India is increasingly seen as a trusted mediator in global affairs and will accentuate this role in 2024 I believe.

     

    New Indian sporting heroes

    As the Indian population gains more leisure time, we’ll see more examples of world-class sporting performance. For example, 17-year-old Dommaraju Gukesh from Chennai became the second-youngest chess Grandmaster when he was 12 years old and has already defeated world number one Magnus Carlson. I predict that India will win more medals at the Paris Olympics this summer than ever before.

     

    India will host the 2036 Olympics

    There have been years of behind-the-scenes lobbying for India to host the 2036 Olympics, probably in Delhi. I predict that there will be an announcement in 2024 as Narendra Modi brings the greatest festival of international sport to the country for the first time, just as China won the 2008 games in recognition of its rising global status.

     

    UPI will gain international acceptance

    The Unified Payments Interface (UPI) which has helped to transform the Indian economy, reducing payment costs and corruption, will reach broad international acceptance in 2024, helping to bring ever more populations out of poverty and strengthen global cooperation. It is another great example of Indian leadership in technology and development.

     

    Political continuity

    As far as there is a sure thing in politics, Narendra Modi is sure to regain the Prime Ministership in this year’s Indian General Election, reassuring the markets and investors that they can plan for the future with confidence. I expect to see an upsurge in economic activity following the election as people make their bets on the next five years.

     

    India’s GDP could overtake Germany’s

    On current projections, India’s GDP will reach $4 trillion sometime in 2024 and could pass that of Germany (currently $4.4 trillion) and Japan ($4.2 trillion) by the end of the year to attain third spot globally. This would have profound implications for the world economy and encourage yet more investment into the country.

     

    Happy New Year!

     

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book, The Indian Century, will be out soon.

     

  • Indians Head London Property Rankings

    Dinesh Dhamija

    When he paid £138 million for Aberconway House in Mayfair last week, Adar Poonawalla joined a growing list of Indian billionaires with trophy assets in central London.

    He is now within a bicycle rickshaw ride of fellow Indian billionaire Ravi Ruia, who paid £113 million for Hanover Lodge in Regent’s Park earlier this year, and GP Hinduja’s redevelopment of the 1,100-room Old War Office in Whitehall, for which he paid £350 million in 2016 and has transformed into a world-class hotel and apartments.

    Ownership of ultra-prestigious London real estate goes in waves. In the late 20th century, the Middle Eastern Sheikhs made their nests in Mayfair. In the early 20th century, it was the turn of the Russian oligarchs. Adar Poonawalla’s purchase brings the number of Indian billionaires with a London pad to at least a dozen, including Lakshmi Mittal and Sri Prakash Lohia, each with top-of-the-scale mansions.

    After concentrating their property investments at home during the pandemic, Indian High Net Worth Individuals have returned to global markets, with the UK as the most popular destination, followed by the UAE and the United States. Some buy for a second home, others as a route to citizenship, others to educate their children.

    Adar Poonawalla is flush with Serum Institute of India’s successful drug revenue: it manufactured India’s most important pandemic vaccine Covidshield. Started by his father Cyrus in 1966, Serum Institute pioneered vaccines for diphtheria, tetanus, and measles, saving tens of millions of lives. Adar took over management in 2011 and rented Aberconway House in 2021, finally deciding to buy it outright from wealthy Polish heiress Dominika Kulczyk this December.

    I predict that 2024 will see a further influx of Indian wealth into the British capital, as more prime London real estate comes up for sale. If anyone really wants to make a splash, they should buy The Holme – the extraordinary Regent’s Park mansion which resembles The White House in Washington DC – currently on sale for £250 million.

    It’s been on the market since last February, so you could probably knock a few million off the asking price. But with 40 bedrooms, eight garages, a tennis court, sauna, whirlpool, grand dining room and library, besides the ornamental lake and four-acre gardens, it costs hundreds of thousands of pounds a year to maintain.

     

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book, The Indian Century, will be out soon.

     

  • Reviving Varanasi: A Journey to India’s Holiest Place

    Dinesh Dhamija

    I’ve just spent a few days in Varanasi, India’s holiest place, celebrating my brother-in-law’s 70th birthday.

    Coming back to this city and seeing India’s mightiest river brought back all kinds of memories.

    In 1999, 24 years ago, my brother and I said farewell to our father and scattered his ashes in the Ganges. As children, we would come to Varanasi and visit the ghats, the temples and the shrines.

    The difference from those days to the present is astonishing. Just to take one example: the Kashi Vishwanath temple – the holiest of the holy places for Hindus – has been completely renovated and is now at the centre of a wide, calm, beautifully-designed precinct and avenue leading down to the river, allowing pilgrims to worship and visitors to enjoy the extraordinary architecture and atmosphere.

    Spread over 5000 hectares, the project cost $95 million and included the restoration of 40 temples along the route, which had been ‘lost’ over the centuries through haphazard development.

    Varanasi – or Benares (‘City of Light’) as it is sometimes known – is one of the world’s oldest cities. This is one of its charms. There are layers upon layers of history jostling together next to the holy river.

    It had also become a problem. As India’s population rose and ever more pilgrims made their way here, the overcrowding became oppressive, even dangerous. Varanasi is the Hindu equivalent of Mecca: worshippers are encouraged to visit at least once in their lives.

    The transformation of the Kashi Vishwanath temple is an example of 21st Indian development at its finest. It welcomes international visitors, who would previously be alarmed by the chaotic bustle. It elevates one of the country’s great architectural marvels to its proper status. And it showcases a new kind of India: clean, orderly, proud of its heritage and appealing to a new generation.

    Anyone who has spent time in India knows that there are thousands of amazing places to see. But for those who are yet to come here, the stereotypical view is: let’s go to the Taj Mahal. And maybe the Gateway of India in Mumbai.

    Broadening this narrow vision is a great service to India and to its visitors. They could consider visiting the majestic peaks of the Indian Himalayas, the idyllic waterways of Kerala, the Ajanta caves of Maharashtra, the tiger reserves of Tamil Nadu or the ancient, ruined temples of Hampi.

    Many visitors remark on how much has changed in India in recent years. It’s true and welcome. I would say that the transformation of Kashi Vishwanath is one of the most important and profound changes and I’d urge anyone coming to India to see it for themselves.

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book is The Indian Century.

  • Dinesh Dhamija: ‘Raise a Glass to Indian Whiskey’

    Dinesh Dhamija

     

    Alongside its population and GDP milestones, this year India celebrated another world first: it is now the largest global market for Scotch whisky, its consumers buying 219 million 700ml bottles in 2022 compared with France in second place, at 205 million bottles.

    That in itself is big news. It demonstrates a sharp rise in disposable income among India’s middle class, now able to afford the 150 per cent tariff on imported Scotch.

    What’s astonishing is that India’s huge imports comprise just 2 per cent of the whisky bought in the country each year, a market now worth around $18 billion.

    Seven of the top 10 global whisky brands, by volume, are now Indian. They include Officer’s Choice, Royal Stag and McDowell’s, while premium brands such as Rampur, a single malt distilled in Uttar Pradesh and selling for the equivalent of £62.50 and Amrut’s Single Malt Whisky, distilled in Bangalore and selling for £50.25, are quickly gaining market share.

    Single malts now make up a third of the whisky market in India, more than double the level of 2017. “Until just a couple of decades ago, alcohol was still a taboo subject in India,” says publisher Vikram Achanta. “Indian spirits, and bar culture, has really taken off in the past few years.”

    Gujarat, home state of Prime Minister Narendra Modi (and Mahatma Gandhi) completely forbids the sale of alcohol, as does Bihar, Mizoram and Nagaland in northeast India. In fact illegal alcohol sale risks the death penalty in Gujarat. Other states such as Punjab impose a 25-year minimum age for drinking. Yet overall, drinking culture is becoming more popular.

    Locally distilled spirits have a strong competitive advantage over Scotch, given the high tariffs. They’ve had to overcome initial prejudice among Indian consumers, who felt that imported Scotch was inevitably of a higher quality. That bias is fading fast. “There is a reverse underlying notion of Indian products being at par or even better than global products,” says Vinod Giri, head of the main Indian drinks trade organisation.

    Four or five new single malt distilleries are in development, as companies rush to capitalise on changing tastes. As one Indian whisky connoisseur puts it: “When you get a single malt that’s as good or better [than imported Scotch], at less than half the price, it’s an offer you can’t refuse.”

    A UK-India free trade deal would level the playing field for imported Scotch, potentially denting the upward momentum of local distilleries. But with the astronomical growth in the market and increasing international acceptance of Indian whisky as a premium product, there should be plenty of takers for wee Indian drams.

    Dinesh Dhamija founded, built and sold online travel agency ebookers, before serving as a Member of the European Parliament. His latest book, The Indian Century, will be published in the Autumn.