The good news is that unlike China, which faces structural change as it shifts from an export-driven to a consumer-driven economy, India’s growth has long been dependent on domestic demand, even as exports have risen. However, its major weakness remains infrastructure, with basic transportation, power grid and irrigation systems lagging behind those of China. In a welcome move, the government plans to increase infrastructure spending by INR1.74 trillion ($38 billion) this year and that is always welcome.
The better news is that unlike China and Brazil, which have witnessed an increase in acquisitions by local private equity firms, India attracts a greater proportion of foreign private equity firms. The country’s legal and governance systems have indeed long attracted private equity investors from around the world which bodes very well for us at Blackhawk.
Further, and since the opening of the economy in 1991, the country has seen huge improvements in both capital markets regulation and in corporate governance.
For more: Challenges and Opportunities in India