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The India opportunity is just getting started

GE Institutional, ANZ

2024-05-22 00:00

Businesses around the world are beginning to grasp the scope of opportunity in India. As global supply chains continue to evolve and doing business in the region becomes easier, we could very well be on the precipice of the Indian century.

The data surrounding India speak for themselves. In March, ANZ Research upgraded its growth estimate for India, and now expects the country’s gross domestic product to rise a full 8 per cent in the fiscal year 2023-2024. While that is expected to slow in 2024-2025, it will still be an enviable 6.8 per cent. S&P expects the country will be the world’s fastest-growing economy for at least the next three years.

Net foreign direct investment (FDI) into India was around $US15bn in 2023 despite cooling of global FDI flows. ANZ Research projects FDI to triple by 2026, reclaiming the lost ground of past few years, and India’s investment-to-GDP ratio is still higher than it was before the pandemic.

India’s middle class is growing rapidly. It has a demographic split that is favourable for growth, and policymakers committed to reducing bureaucracy. The country has been open about its investment in industry, including the manufacturing sector, and sustainability, particularly renewable energy. What’s left to be determined are the results of India’s largest general elections that will set the political direction of the world’s most populous nation for the next five years.

At ANZ, we’re excited about the prospects for business in India moving forward, and we’re not alone. Goldman Sachs sees “exciting long-term investment opportunities in India”. Even famed investor Warren Buffett has spoken about the “unexplored” opportunities in the region.

Despite the excitement, there’s not going to be a tsunami of FDI in the immediate short term. India’s evolution will be gradual. But businesses willing to approach the opportunity pragmatically will set themselves up to reap the rewards of India’s future. And it’s only a matter of time before those opportunities become bedrock of India’s future economy.


I recently spent some time in India meeting clients and officials. It had been some years since I had visited, and the evolution of the economy was visible immediately. Even something as simple as going through customs was an improved experience. Where in years gone by this might have taken hours, in 2024 I was through in 10 minutes.

India’s investment in itself, particularly infrastructure like road and rail, was also obvious where I travelled. Congestion is still an issue, but it’s hard not to notice little positives everywhere you go.

The investment in digital is going a long way to reshaping the country’s economy. The success of India’s services sector is well known, and that industry continues to show strong signs of growth. Without doubt, there is an opportunity for offshore businesses in this space, and ANZ expects it to only grow.

Renewable energy is another area that has benefited from investment in India. In 2024 more than 70 per cent of India's new power generation came from renewable sources - a significant opportunity for multinationals in that sector. India recently overtook Japan to become the world’s third-largest solar power generator.

These moves are helping build a strong foundation for investment in India’s economy, creating and maintaining attractiveness for capital. And they come at a time many businesses are considering their diversification strategies in the Asia-Pacific region.

Diversification is increasing as businesses reorganise supply chains to create resilience. South-east Asian markets, particularly Vietnam, have been beneficiaries of the shift. US firms are bullish on India’s role in this area but the opportunity for investment around the world is vast.

At ANZ, we’re often asked for our thoughts on the value of shifting supply chains in today’s market. It’s a difficult question as it’s very hard to generalise across a wide range of industries.

There are a few things that separate successful diversification strategies from the rest. Successful businesses understand the sector they are in, and work with the right partners to correctly assess the growth prospects and opportunities in both their current locations and potential future ones. If the imbalance is clear, and favours the latter, then well-capitalised businesses can successfully diversify if the shift is executed well.

The flipside are shifts or purchases that are not managed well, due to insufficient due diligence or lack of commitment. This is where some businesses can get into trouble.

As a bank we’ve onboarded about 15 Australian customers in India over the past 12 months, across a handful of sectors. We now have almost 200 clients representing the Institutional segment of India as our client base. This is just the start as we’re seeing more businesses consider their opportunities in India, both from our home markets of Australia and New Zealand and elsewhere.


When customers talk to us about the path to success in India, our first response tends to be ‘slow and steady’. Due diligence is required. Being clear about the industries viewed as an opportunity and the customer base therein is critical.

ANZ encourages those interested to work closely with applicable governments and trade bodies on all sides. In many ways, much of the advice is quite similar to that given to businesses in assessing the China opportunity 15 or 20 years ago. 

Businesses can also consider partnering with locals to take advantage of the India opportunity. There are many large, high-quality and diversified companies in India, many of which are also looking for partners in various parts of the economy. Taking this path requires being thoroughly selective, but can be equally rewarding.

There’s no doubt India has seen a number of ‘false dawns’ over the years, so any interested businesses need be pragmatic and cautious. But the economy will continue to grow and attract investment, and the size and scope of the opportunity is undebatable.

ANZ’s presence in India is strong and the bank has plans to grow, including doubling our capital in the economy in the past two years. We’re talking to potential new customers across a range of sectors, but we’re eager to make sure those customers also value what we bring as a bank.

My recent trip to India convinced me of the growing opportunity in India. This is India’s century - it’s hard not to feel positive about the future, and it’s time to get on board.

Mark Whelan is GE, Institutional at ANZ

The India opportunity is just getting started
Mark Whelan
GE Institutional, ANZ
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