YOUNG AND VIBRANT

  • India is the world’s second-largest country of inhabitants and enjoys a relatively young population for advantageous demographics, especially against developed markets.
  • India is projected to benefit from a multi-decade demographic dividend for a low cost, highly productive labor force to realize economic potential.

COMPARING AGE PYRAMIDS: INDIA VS. DEVELOPED MARKETS

Percentage of Total Population

GLOBAL DEMOGRAPHICS: INDIA APART

Age Dependancy Ratio

INDIA'S LONG-RUN GROWTH: NOT A FLASH IN THE PAN

  • India stands out as having one of the world’s fastest growing economies that has accelerated in recent years.
  • Political and economic reforms, increased consumer and investor confidence have supported India’s economic expansion.
Source: World Bank Development Indicators, Mirae Asset Global Investments (2017)

ECONOMIC RATES OF GROWTH BY GEOGRAPHY (1965-2015)

  • India's elevated levels of growth underlie a historical trend as opposed to a one-off event, with the pace exceeding world and emerging market growth tangents since the mid 1970’s.
  • The nature of India’s growth engine has incrementally moved away from the agriculture sector and into services as the country moves up the development ladder.
GDP Growth

GDP COMPOSITION: FROM AGRARIAN TO INCREASINGLY SERVICE-LED

Source: Motilal Oswal Securities Ltd. (September 2016)

IMPROVED MACROECONOMIC FUNDAMENTALS

  • The macro backdrop is positive as the current account balance glides lower with softening inflation, bolstered by higher foreign exchange reserves that culminate into better confidence for bond yields.
  • These markers provide confidence for the inflection of growth points and an improving consumer.

SCISSOR EFFECT: LOWER CURRENT ACCOUNT DEFICIT WITH HIGHER FOREIGN DIRECT INVESTMENTS

Source: CLSA, RBI, CMIE, Mirae Asset Global Investments (January 2017)

MODERATED INFLATION (CPI)

Source: Mirae Asset Global Investments, Bloomberg (2017)

FOREIGN EXCHANGE RESERVES BUILDUP

Source: Mirae Asset Global Investments, Bloomberg (2017)

EXPANSIVE INFRASTRUCTURE SCALING UP FOR PEOPLE AND GOODS

  • Indians travel widely by rail although the mode of transport is responsible for moving one-third or so of cargo and is more economical for longer distances exceeding 500km, with the remainder transported on roads.
  • The Dedicated Freight Corridor (DFC) will change existing rail cargo landscape with thousands of kilometers of rail is expected to boost container train operators with double-stacked freight capacity.

PASSENGER TRAVELING BY RAIL

PASSENGER TRAVELING BY RAIL
Rank Country Name Passengers Carried
(Million Passenger - KM)
1 India 1,160
2 China 807
3 Japan 260
4 Russia 129
5 France 84

Source: World Bank, Transportation, Water, and Information and Communications Technologies Department, Transport Division.
Note: Passenger-kilometers calculated by rail travel distance between origin and destination multiplied by number of passengers traveling

SHARE OF RAILWAYS IN DOMESTIC FREIGHT

Source: International Union of Railways, Ministry of Railways, Citi Research (2016)

COMPLETED RURAL ROADS IN INDIA UNDER PMGSY

Source: Pradhan Mantri Gram Sadak Yojana, Ministry of Rural Development, Mirae Asset Global Investments (2017)

GROSS FIXED CAPITAL FORMATION (% OF GDP)

Source: World Bank national accounts data and OECD national accounts data files, Mirae Asset Global Investments (2017)

CUTTING RED TAPE FOR POLITICAL AND BUSINESS RESULTS

FAVORABLE PUBLIC OPINION OF POLICY AND ECONOMY

  • Public policy is riding high on a wave of optimism following a focus on results and policy execution that has gained the hearts and minds of the general public.
  • Economic development and inclusion are taking center stage as government-citizen and government-business interactions result in better governance, less corruption, fairer rules, and improved productivity.
Source: Pew Research Center (Spring 2016 Global Attitudes Survey), Mirae Asset Global Investments (2017)
  • More developed infrastructure enhances state competitiveness, benchmarked in state competitiveness reports where in better performing states correlates to political longevity.
  • Interstate competition creates jobs and encourages capital expenditure cycle recovery to lift consumer and business confidence, ease business process and laws, streamline bureaucracy, and reduce corruption.
  • India made the largest year-on-year jump (16-places) of any country in WEF's Global Competitiveness Index to no.39.

INDIA'S GLOBAL COMPETITIVENESS IN THE MAKING

Source: Global Competitiveness Index (2016-2017 edition), World Economic Forum; Mirae Asset Global Investments (2017)

INDIA AMONG PEERS IN GLOBAL COMPETITIVENESS METRICS (2016-2017)

Source: Global Competitiveness Index (2016-2017 edition), World Economic Forum; Mirae Asset Global Investments (2017)

A HEALTHY INDIAN CONSUMER

  • The Indian consumption story is in its infancy as a sustainable and stable megatrend underpinned by the newfound purchasing
    power of the rising Indian middle class.
  • Unleveraged households permits affords higher upside opportunities in healthcare and consumer-related sectors.

EARLY DAYS FOR THE INDIAN CONSUMER

Source: International Monetary Fund, World Economic Outlook Database (April 2016)

UNLEVERED INDIAN HOUSEHOLDS

Source: CEIC, Haver, Eurostat, Morgan Stanley, Mirae Asset Global Investments (June 2016)

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