A sluggish economy has not dampened India’s appeal at Davos

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Seven years ago at Davos, Indian Prime Minister Narendra Modi spoke of India’s ambition to become a $5 trillion economy by 2025.

“The people and youth of India now Ready to contribute to building an economy will be $5 trillion by 2025,” he outlined in his speech at the 2018 World Economic Forum (WEF).

“Not only this, but when innovation and entrepreneurship … help (individuals) transform from job seeker to job employer, one can only imagine how many avenues will open up for their country and your business,” Modi added.

It’s fair to say that meeting that goal has proven difficult.

India’s economy is expected to stay around $4.27 trillion this year, according to the International Monetary Fund$0.73 trillion short of Modi’s target.

of Slow economy The country’s high growth target has been questioned. Market watchers argue that India is now in a cyclical recession.

Interestingly though, India’s story – and its growth potential – continues to capture the attention of investors in India, Davos and beyond

This includes India Top five regions Where global CEOs surveyed by consultancy firm PwC are looking to invest in the next 12 months. Other regions that cracked the top 5 among 4,700 CEOs surveyed in 109 countries were the US, UK, Germany and mainland China.

There is optimism about India in the ongoing talks at Davos.

Speaking to CNBC on the sidelines of this year’s World Economic Forum, Khaldun Al Mubarak is the Managing Director and Group CEO of Mubadala Investment Company described India as a “very, very attractive country (and) a very attractive market”.

The metrics that stand out to him on India’s potential are its large, yet young population. About 480 million Indians are under 18 years of age – more than the population of the United States, the combined population of Europe, the Middle East as well as South America combined, Mubarak said.

“We’ve been investing in India … for years, and we’re continuing to build our portfolio in India and really get on the wave that’s already started,” he said.

This cycle, he added, “will continue, in my view.”

Mubadala’s investments in India include Tata Power Renewable Energy and Tata Power, owned by the Tata Group Reliance Industries-Supported technology giant Jio platform.

Prosus is another investment company looking to cash in on India’s growth potential, particularly in the country’s technology industry.

“You see the impact of technology in India … and they are saying ‘we are ready for the next step’,” said the company’s CEO Fabricio Bloesi told CNBC On the sidelines of the summit.

“Process is ready to invest heavily in India. We have invested $8 billion there in the last few years and we will invest much more,” he added.

The Indian startup has invested in process food delivery firm Swiggy, edtech firm BYJU’s, agritech player Dehat and e-commerce platform Misho.

Growing up in technology

The interest in India – especially its opportunities in the technology and startup space – is consistent with the government’s strong focus on developing the sector.

Among the key priorities of India’s delegation at Davos this year was to deepen its foothold in the semiconductor industry through government incentives and targets.

This includes exploring the development of its own graphics processing unit (GPU) over the next three to five years, Railways, Information Technology and Information and Broadcasting Minister Ashwini Vaishnab said. CNBC-TV told 18 on the sidelines of the WEF meeting.

Other projects he revealed include India’s plan to manufacture 25 indigenous chipsets Designed and manufactured in the country. It expects to roll out the first chip by September and the first fab by 2026.

Vaishnav also outlined the government’s aim to provide underlying compute power with 1,000 GPUs, especially to benefit start-ups that don’t have access.

He added, part of the government’s focus this year is to boost talent and leverage data to generate robust datasets for training AI models.

Vaishnav led India’s largest delegation to Davos this year, with representatives from eight states: Andhra Pradesh, Telangana, Karnataka, Kerala, Tamil Nadu, Maharashtra, West Bengal and Uttar Pradesh, each with Awaiting investment for their upcoming ventures.

Such as Andhra Pradesh Chief Minister Chandrababu Naidu It has demonstrated the state’s business-friendly policies In hopes of persuading multinationals like Unilever, PepsiCoGoogle Cloud and AstraZeneca.

Its neighbor Telangana, meanwhile, has showcased its expertise in electric vehicles, pharmaceuticals and semiconductors. Elsewhere, Maharashtra is said to have presented itself India’s industrial powerhouse.

The heavy presence of Indian officials at Davos is perhaps a recognition of the fact that companies, especially those that have only been around for a few years, need more capital than they can raise domestically.

Foreign investment in the country is “drying up” due to economic policy uncertainty and geopolitical risks, according to Dhiraj Nim, foreign exchange strategist and economist at ANZ Bank.

He suggested that one way forward was for the Indian government to “increase greater confidence by reducing political and regulatory costs, increasing the ease of doing business in India”.

“Even if global variables are out of control, India can do a lot. India plans to become a developed country by 2047, so we will need stronger growth than the 6 – 7% we are using. And the growth will realize more investment and labor force. To be implemented through productivity and technological capacity building,” Nim added.

How India plans to continue growing at a sustainable pace, while providing jobs and increasing productivity, is top of mind for the Indian government. At Davos, India’s Minister of Railways, Electronics and Information Broadcasting, Mr. Ashwini Vaishnav sat down to discuss with a group of global executives, investors and Indian entrepreneurs. The breakfast, hosted by Brunswick Group and CNBC on the sidelines of the World Economic Forum, allowed executives and investors to ask the minister questions and discuss the investment climate in India.

India may lower its investment target for FY25. The country’s government is looking Cut its investment and asset monetization targets 40% – or less than 500 billion rupees to 300 billion rupees ($3.47 billion) – for the 2024 to 2025 fiscal year, The Economic Times reported, citing people familiar with the negotiations. Regulatory hurdles and valuation difficulties have proved to be roadblocks, but Prime Minister Narendra Modi’s administration has still sold more stakes in state-run companies than any previous government.

Chaturdashi called and reaffirmed their partnership. According to a joint statement issued after talks in Washington, the foreign ministers of the group comprising the United States, Australia, India and Japan met on Tuesday and stressed the importance of preserving a free Indo-Pacific. The meeting, hosted by US Secretary of State Marco Rubio on his first day on the job, was meant to signal that Countering China has been a top priority for the Trump administrationAnalysts said.

Oil prices may increase in India. The United States imposed New sanctions on Russian oil 10 January. As India imports about 40% of its oil from Russia, New Delhi could face a sudden supply crunch, according to trade intelligence firm Kpler. Supply in India may be disrupted As high as 500,000 barrels per dayViktor Kurilov, senior analyst at Rystad Energy, told CNBC. To mitigate the potential oil shock, Indian importers are looking to import oil from Middle Eastern suppliers.

Indian stocks traded mixed this week. D Nifty 50 The index fell 0.03% this week and closed at 23,205.35 points.

The benchmark 10-year Indian government bond yield was flat at 6.78%

This week on CNBC TV, Kumar Rakesh, India analyst at BNP Paribas, revealed: Optimism in the Indian auto industry. Rakesh said India’s exports of passenger vehicles and motorcycles have been growing at a reasonably strong rate in recent years, particularly in the African, Latin American, Middle East and Southeast Asian markets. Moreover, Indian automakers have been able to enjoy higher profits because their production costs domestically are among the lowest in the world.

Meanwhile, Jose Rasco, CIO of HSBC Global Private Banking and Wealth Management Americas admitted that the Indian market is not cheap, but that is because investors “Paying for quality” Some of the features that attract investors to India are its young and diverse economy, a sound legal system and productivity growth in recent years.