First, let us get this straight: India has been booming as far as foreign direct investments go, especially under Prime Minister Narendra Modi’s government which has been positive for employment, technology transfer and overall growth, attracting business people from around the world.
Numbers don’t lie and expose the overly subdued narratives about India’s high economic achievements. Even the highly regarded “conservative” magazine, the Economist, has been bullish on India. Closer home, key proof comes from The Economic Times, which has specified that “India recorded the highest ever annual foreign direct investment of $83.57 billion in 2021-22. In 2020-21, the inflows were $81.97 billion. FDI equity inflows in manufacturing rose 76% in FY22.”
Yet, according to Invest India, total accumulated US investment, near to date in the country amounted to around only $US 60 billion, and the corresponding figure is around $US 120 billion into China (statista.com). This is a stark contrast.
However, it is not to forget the context that for years, the geopolitical conflict and tensions between China and the West, especially with the United States, have been seemingly trending towards the catastrophic over Taiwan and beyond. All at the same time, India has been a part of the Quad and Prime Minister Modi has had mutually warm relations with Washington and much of the global investment community. What then explains such huge investment differences between what the US invests in China versus booming India?
After looking at some investors abroad, my calculation is this can be a result of relative ignorance about and bias against India, even today, including by Wall Street to the UK’s City of London to Canary Wharf financial centres. The continuing bombardment by such US main media outlets as ABC recently as of June this year and a BBC documentary pounded away with falsehood and distortions about New Delhi showing intolerance to religious freedoms, may not help. Also, lot of news in America and the West over-emphasize extreme incidents, often localized, but prejudicing India to look too chaotic and backward, reducing no doubt the attractiveness of a country that is largely well-ordered, growing fast though suffering pockets of poverty that desire more investment to help move them forward. US and UK financial institutions have seemingly not done enough homework because, in part, they have had such a fixation on China, causing them in a sense to be more critical against India. This includes the West and US/UK big finance particularly not recognizing enough the new Indian-Modi economic “miracle” of the last several years with old thinking the Chinese one is so much better—even today, with China in such a challenging situation. Concrete proof of such resistance is a prominent article in “Foreign Affairs”, likely the number one review for the US international relations establishment. It is titled, “Why India Can’t Replace China” and even projects the end of India’s boom. One might think that the major pro-China lobbies are still getting too much in the head space of Washington, though with times, so much economic ground is shifting in favour of India. Then, also think of this. Major US establishment insiders of former US Treasury Chiefs, Hank Paulson and Timothy Geithner, were also heads within the huge, US investment bank, Goldman Sachs. And interestingly, just the other day, these two were interviewed by Fareed Zakaria on the leading CNN, GPS TV show he hosts. But instead of talking about India, those interviewed were extolling the virtues of the US, essentially to keep investing in China and maintaining strong economic links with it.
But all three should have been talking up both the commercial benefits of western global finance to focus on New Delhi and the positive developments brought on by the Modi government to attract investments and create prosperity. Clearly, China has more ear of the Wall Street.
It is also so interesting to know that the small, city-state Singapore invested much more and Mauritius about the same as the US invested in India.
In fact, Singapore invested almost thrice as much as the US with the former doing about 17 billion dollars and the latter 6 billion dollars, in India investments for 2022 to 2023, according to deccanherald.com. Even the UK with its centuries-old history with India and its mega-financial centres has only put 18 billion dollars into the total accumulated pool—not the annual pool. This is almost chump change in the global investment and Indian economic pictures.
One could also argue that Wall Street, which includes much offshore money, a type of money that Mauritius and Singapore have a lot of, has way significantly and comparatively missed the boat on investing in India given how it dwarfs these islands in the trillions it holds. It has potentially not only to use to catch up with the small Singapore, one of the many offshore and tax haven “Treasure islands”—a term used in a book of the same name authored by Nicholas Shaxson. So, Wall Street could massively overtake Singapore’s lead in a quick snap of the fingers. It should.
India may also prove as a very positive alternative destination for off-shoring production and diversifying supply chains for the West and beyond, given certain geopolitical realities. But, it is also my belief, as outlined in some of my previous commentaries in this newspaper warning about globalists, that some of them have been likely putting up information blocks that distract major financial players from understanding this boom in India, the superpower direction India is going to, its true democratic and positive cultural values, high returns on equity and quality and better educated labour, evermore. In fact, new generations of Wall Streeters have more nuance to adjust their approaches to be more sensitive to local values that India cherishes, including sovereignty. And even just one Wall Street Fund, such as BlackRock, has multiples of tens of trillions of dollars it manages to further supercharge India’s rise to the near global top.
Investing much more by Wall Street in India would be a two-way, win-win and strategically smart for both countries if done properly. The most populated country destined to even be the number two or three super-power, one day deserves a much more respectful approach from Wall Street and London-based financial institutions.
Peter Dash has worked for many western multinationals, written for trade publications and did graduate business studies.
