- India has landed a lunar module on the moon, receiving global attention
- Geo-politically, India is treading the line between Russia and the West well
- Indian factory activity hit a 3 month high in August – driven by strong growth in new orders and output
- The economy expanded by 7.8% from April-June on an annual basis, which could boost foreign investment
The 18th G20 Summit is fast approaching and will be held in New Delhi, India. All eyes will be on India’s Prime Minister, Narendra Modi as his country prepares to welcome the two-day summit across 50 different Indian cities. The world’s largest democracy with a population now reaching 1.3 billion has been keen to position itself as a leader of emerging, but also of developing nations.
India’s lunar mission
There is now another country that can reach the moon. The Indian Space Research Organisation’s success makes India one of only four countries to have landed on the moon, the other three being America, China and the Soviet Union. Currently three if you consider that Russia hasn’t managed anything comparable and lost control of Luna-25 while the spacecraft was still in orbit.
Narendra Modi gave a smile from the Mission Control room in Bangalore and couldn’t resist to relay his success at the BRICS summit in Johannesburg last week. The landing has captivated the Indian audience and reinforces the positioning of India in becoming a global main player in all fields.
A UK-India trade deal
When Sunak visits New Delhi for the G20, he will continue to push for a closer relationship between Britain and the largest and growing Asian country. A strategy that Sunak has pushed since the beginning of his tenure, a vision of “Global Britain”. Both countries are now entering their 13th round of discussions, with main topics being visa concessions and lower trade tariffs. We anticipate that a deal can be reached as both countries have very few export goods in common.
India stands alone, declining to pick between the East and the West. Modi is still trading with Russia and has increased its oil purchases from Russia since the beginning of the war in Ukraine. At the same time, India has a distant relationship with China due to border clashes. Under Modi’s instruction, India have joined the Quad (Quadrilateral Security Dialogue) with Australia, Japan and the US, a strategic dialogue to keep a free and open Indo-Pacific Sea. We believe this to be in response to increased Chinese economic and military power.
India is in the centre of a very polarized world, and purposely, trying not to fall out with any of both sides while stimulating the growth of its economy in the 21st century.
Year to date, our Indian equity exposure is up 6.87% in sterling terms as at 25th August. We have held exposure to India for some time, with the view that the country will continue to prosper economically in the long term and indeed benefit from the Chinese slowdown in the short term. Whilst allocating to a single country can increase short term volatility, we continue to diversify across the Asian continent. For now, investors are enjoying the wave of optimism being seen in India.
Source: Refinitiv – Market returns as at 31/08/2023