The Indian chairman of the Hinduja Group conglomerate said he is optimistic about India, calling it “the very large emerging, fast-moving market”.
Speaking to CNBC on Thursday, Ashok Hinduja explained: “We see a recession coming in the US, a recession in the UK, in Europe, trouble in China, [a] problem in Southeast Asia under the fear of China-Taiwan. So looking at the overall scene, let’s focus now [on] India as an emerging market.”
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The Hinduja Group is headquartered in India, although it owns companies in many industrial sectors and has a presence in nearly 40 countries, including the United Kingdom, Switzerland and the United States.
Its showpiece is Ashok Leyland, one of the leading commercial vehicle manufacturers in India.
“India is well organized politically,” the chairman told CNBC’s Tanvir Gill.
“The credit goes to our Prime Minister,” he said, referring to Prime Minister Narendra Modi. “He has, in the current situation, handled relations with the US, with Europe, with Russia, with China – although there were problems with China, but he handled it well, it is under control.”
Tensions between India and China rose in 2020 after their forces clashed on a shared border, and remain tense. More recently, Western countries have criticized India for ramping up its purchases of Russian oil as that country’s invasion of Ukraine progressed.
Workers unload goods from a truck in the main market area in Gandhidham, India. India is a great market and the “best bet” in the global economy, said Ashok Hinduja, chairman of Hinduja Group, India.
Prashanth Vishwanathan Bloomberg | Getty Images
When asked whether rising interest rates and the risk of a recession in the United States will affect India, Hinduja said the impact would be somewhat limited.
He pointed out that US and European stock markets are lower this year, while Indian equities are 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%.
Economic growth is slowing
Hinduja claimed the government in India is tackling corruption and said it will make investments in infrastructure ahead of the May 2024 elections.
“Infrastructure spending will be there, economic growth will come in, so we see, looking at the global stage, India today is [the] best bet,” he said.
India’s annual economic growth was tremendous in 2022, although the rate of growth seems to have slowed recently.
Last week, the OECD said that on a quarterly basis, India’s second-quarter GDP growth was the second worst among the G20 group of leading rich and developing countries. Earlier this month, Goldman Sachs lowered its full-year forecast for India’s gross domestic product growth from 7.6% to 7%.
According to a report from India’s Ministry of Finance, the country received $17.3 billion in FDI in the first quarter, ahead of emerging countries like Indonesia and Argentina, but behind countries like Brazil and Mexico.
China’s foreign direct investment eclipsed India’s by $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.