India is the ‘best bet’ in the global economy

The Indian chairman of conglomerate Hinduja Group said he was bullish on India, which he called “the very big emerging, fast-moving market”.

Speaking to CNBC on Thursday, Ashok Hinduja explained: “We see recession coming in the US, recession in the UK, recession in Europe, problems in China, [a] Problem in Southeast Asia amid China-Taiwan fears. So, looking at the overall scene, let’s focus now [on] India as an emerging market.”

The Hinduja Group is headquartered in India but owns companies in many industrial sectors and has a presence in nearly 40 countries including the UK, Switzerland and the United States.

Its flagship is Ashok Leyland, one of India’s leading commercial vehicle manufacturers.

“India is politically well positioned,” the leader told CNBC’s Tanvir Gill.

“The credit goes to our prime minister,” he said, referring to Prime Minister Narendra Modi. “He has managed relations with the US, with Europe, with Russia and with China in the current situation – although there have been problems with China, but he has managed it well, it is under control.”

Tensions between India and China escalated in 2020 after their forces clashed on a shared border and remain tense. More recently, Western countries have criticized India for increasing its purchases of Russian oil as that country’s invasion of Ukraine continues.

Asked if rising interest rates and recession risk in the United States would hit India, Hinduja said the impact was somewhat limited.

He noted that US and European stock markets have been down this year, while Indian stocks have been more resilient.

The S&P 500 and the pan-European Stoxx 600 are both down more than 17% this year. India’s Nifty 50 is up about 1%.

Hinduja claimed the government in India is fighting corruption and said it will invest in infrastructure ahead of elections due before May 2024.

“The infrastructure spending will be there, the economic growth will come, so what we see when we look at the global scene is that India is today [the] best bet,” he said.

India’s year-on-year economic growth was stunning in 2022, although its growth rate appears to have slowed of late.

Last week, the OECD announced that India’s second-quarter GDP growth quarter-over-quarter was the second-worst among leading rich and developing countries in the G-20 group. Earlier this month, Goldman Sachs lowered its full-year forecast for Indian gross domestic product growth to 7% from 7.6%.

The country received US$17.3 billion in foreign direct investment in the first quarter, according to a report by India’s Ministry of Finance. That puts it ahead of emerging markets Indonesia and Argentina, but behind countries like Brazil and Mexico.

China’s foreign direct investment dwarfed India’s at 101.9 billion over the same period, the report said.

In the second quarter, India’s foreign investment fell to $16.1 billion, the ministry said.