Why This Investor Sees Big Opportunities In India

India has been cited as one of the leading foreign direct investment (FDI) destinations in Asia and globally. It’s no secret that India is growing at a tremendous pace (India is currently one of the fastest-growing major economies in the world). Some economists even estimate that India will become one of the top global economic powers in the coming years, partly attributed to FDI. Since the early 90s, foreign investors have continued pouring money into the nation’s financial services sector and other industries. But what makes India attractive to FDI investors? In a world filled with opportunities, we wanted to know why India stood out to international investors. Today we talked with investor Robel Getaneh about why international investors love India.

Robel Getaneh is the founder of the US-based private investment firm Getaneh Global, which has a portfolio of investments in emerging markets. Robel has traveled extensively throughout Asia, collaborating and investing in startups throughout the southeast region. Robel’s first investment in India was in 2016 when he provided seed funding for a digital marketing agency. The central thesis around Robel’s investments in India stems from the belief that more and more companies in developed nations will continue to outsource work into India, directly benefiting local entrepreneurs in India.

“In the 90s, outsourcing work to India did not make much sense for American-based companies due to several factors, including time zone differences, internet reliability issues, and a lack of long-distance management tools. Thanks to technological advancements in telecom, outsourcing was made easy and transparent for companies,” says Robel. “The types of work outsourced to India are more diverse today than in the 90s when it was only IT and customer support jobs. From accounting to SEO marketing, Indian entrepreneurs continue to expand their expertise and their wallets.”

Robel believes investors will continue to find great investment opportunities in India because the country has two structural benefits that will help power growth, with little to no interruptions: democracy and population.

“India is a democratic country with checks and balances, which reduces political risks. India is also one of the most populated countries, which means it has a lot of human capital. India has a population of 1.417 billion as of 2022, with most people in their youth. The median age in India is 28, which translates to a larger workforce and presents a competitive advantage.”

Although Robel has primarily invested in private deals within India, he believes investors can also get remarkable returns in the public markets. “Take a look at what BSE SENSESEX (an index comprising 30 established companies on the Bombay Stock Exchange) has done since 1998 until 2023; it has skyrocketed up 2,500%. Compare those returns to the S&P 500 in the U.S., which only appreciated 270% in that same time frame.”Some global investors may be warming up to the idea of diversifying their funds into India after decades of concentrated investments in America. But savvy investors know that past performance is no indicator of future performance; thus, many people wonder if India’s economy still has legs to run; Robel’s intuition tells him yes. “When I think about the next 10 or 20 years, there is a clear path for India to become the second-largest economy in the world. India has a large population of young people who are extremely productive; the country has a low debt-to-GDP ratio which gives them financial flexibility. It’s no secret why India’s economy continues to grow faster than many developed nations, like the United States and Germany. If I were a betting person, I would put all my chips on India. The best is yet to come!”