The India chairman of conglomerate Hinduja Group said he’s bullish on India, which he called “the very great emerging, fast moving market.”
Speaking to CNBC on Thursday, Ashok Hinduja explained: “We see a recession coming in U.S., recession coming in U.K., in Europe, problems in China, [a] problem in Southeast Asia under the fear of China-Taiwan. So looking to the overall scene, we focus now [on] India as an emerging market.”
The Hinduja Group is headquartered in India though it owns businesses across many industrial sectors and has a presence in nearly 40 countries, including the United Kingdom, Switzerland and the United States.
Its flagship business is Ashok Leyland, one of India’s leading commercial vehicle manufacturers.
“India, politically, is well settled,” the chairman told CNBC’s Tanvir Gill.
“The credit goes to our prime minister,” he said, referring to Prime Minister Narendra Modi. “He has handled, in the current situation, relations with U.S., with Europe, with Russia, with China — though there were problems with China, but he has handled it well, it’s under control.”
Tensions between India and China sharpened in 2020 after their troops clashed on a shared border, and remain strained. More recently, Western countries have criticized India for increasing its purchases of Russian oil as that country’s invasion Ukraine rumbles on.
Workers unload goods from a truck in the main market area in Gandhidham, India. India is a great market and the “best bet” in the global economy, said Ashok Hinduja, chairman of Hinduja Group, India.
Prashanth Vishwanathan | Bloomberg | Getty Images
Asked if rising interest rates and the risk of recession in the United States will affect India, Hinduja said the impact would be somewhat limited.
He pointed out that the U.S. and European stock markets are lower this year, while Indian shares have been more resilient.
The S&P 500 and the pan-European Stoxx 600 are both down more than 17% this year. India’s Nifty 50 is up around 1%.
Economic growth abates
Hinduja claimed the government in India is tackling corruption and said it will be making infrastructure investments before the elections that are due before May 2024.
“Infrastructure spend will be there, economic growth will come in, so we see, looking to the global scene, India is today [the] best bet,” he said.
India’s year-over year economic growth has been blistering in 2022, though its rate of growth appears to have abated more recently.
Last week, the OECD said that on a quarter-to-quarter basis, India’s second-quarter GDP growth was the second worst among the G-20 group of leading rich and developing countries. Early this month, Goldman Sachs lowered its full-year forecast for India gross domestic product growth from 7.6% to 7%.
According to a report by India’s ministry of finance, the country received $17.3 billion in foreign direct investment in the first quarter, which puts it ahead of emerging peers Indonesia and Argentina, but behind countries including Brazil and Mexico.
China’s foreign direct investment dwarfed India’s at 101.9 billion over the same period, the report said.
In the second quarter, India’s foreign investment declined to $16.1 billion, the ministry said.