In 30 years, it has risen 100 times! India, completely exploded

01

In India, Asia's most populous country, the stock market has gone crazy.

Since the pandemic last year, 20 million Indian retail investors have poured into the stock market. Since 2008, India's stock market has emerged from a 13-year bull market and continues to reach new highs, with the Mumbai SENSEX Index up 702%. Since the early 1990s, the Indian stock market has risen by 10,900%.

As of the close of trading on December 4, the total market capitalization of the Indian stock market reached $3.56 trillion, ranking fourth in the world. India's ruling Bharatiya Janata Party (BJP) has won key victories in three of the four state assembly elections, which will allow Modi to bid for re-election in next May's general election. In addition, strong macroeconomic data and, for India, the improving global environment, will continue to help the Indian stock market continue to rise.

There are reports that the Indian stock market is just one step away from an unprecedented market capitalization of $4 trillion. The market value of securities listed on exchanges in India has tripled to $3.93 trillion as of Friday since the pandemic lows in March 2020. The National Exchange of India's Nifty 50 index climbed to a new record high on the day.

If there is a long-term positive expectation, the stock market will naturally usher in more investment, and on the contrary, there will be a large net outflow. How can a market with a net outflow be good?

02

India's economic development is currently better than expected. According to government data, GDP grew by 7.6% year-on-year for the three months to the end of September, higher than all estimates in a Bloomberg survey of economists. This figure was also significantly higher than the RBI's forecast of 6.5%.

Strong economic growth means that India will continue to maintain its position as the world's fastest-growing major economy as manufacturers ramp up production, consumption growth accelerates, and the Modi government steps up investment ahead of next year's election.

India's economy has shown resilience amid soaring inflation and the central bank's six interest rate hikes since last year.

"Strong economic growth is underpinned by cyclical factors such as strong corporate profits, strong fiscal stimulus and government spending ahead of the election," said Madawi Arora, an economist at Emkay Financial Services.

03

It has to be said that India's young human resources are becoming more and more valuable.

In April this year, India's total population reached 1,428.6 million, surpassing China to become the world's most populous country.

And more importantly, the Indian population is very young. As we all know, in order to develop the economy and industry, it is necessary to have a large number of young people.

In 2021, the proportion of India's population aged 65 and over was 6.8%, and it has not yet entered an aging society (the world's aging standard is that the number of people aged 65 and over in a country or region reaches more than 7%). In terms of age composition, the proportion of the population aged 0-14 is 25.8%, the proportion of the population aged 15-64 is 67.4%, and the number of people aged 65 and above is 94,413,200.

In terms of gender, the male population is also relatively larger than that of women. But not to the point of exaggeration, the male-to-female ratio (male-to-female ratio for every 100 females) is 108.1. From the perspective of urbanization process, India's urbanization rate is 35.4%, and the urbanization rate is increasing year by year.

According to the current situation, India's population structure will be close to that of China by about 2050, which means that from now to 2050, India's labor advantage will be unparalleled in the world.

04

Of course, the Indian stock market myth wants to continue, and not a sudden "bang" in the middle, there is still a long way to go.

First of all, it is necessary to improve the business environment, because in recent years, India has relied on its geopolitical advantages to be unfriendly to foreign investment, and has used some populist means to target foreign investment at every turn.

The following are the penalties imposed on foreign-funded enterprises in India in recent years, and those less than $100 million are not worth mentioning:

In 2007, Vodafone was fined $2.1 billion for tax evasion, Li Ka-shing was also fined $1.2 billion, Vodafone dragged on for 12 years, the fine was increased to $5.1 billion, Vodafone appealed to the International Court of Arbitration, won the lawsuit, India amended domestic laws overnight, and retroactive tax came into being.

In 2008, India fined Microsoft 7 billion rupee for failing to pay enough taxes.

In 2013, India's tax authorities knocked out Nokia's $256 million bargain on the grounds that it had violated fair competition.

In 2013, India fined IBM $860 million for monopolistic operations and unfair competition.

In 2013, India fined BMW US$100 million for violating import laws.

In 2014, India fined Samsung $200 million.

In 2021, India fined Walmart $1.35 billion for violating foreign investment laws, but Walmart couldn't stand it and withdrew from the Indian market in 22.

In 2022, India fined Samsung another $212 million for tax evasion.

In 2022, India fined Amazon $172 million for violating relevant financial regulations.

In 2022, Google was fined a total of $275 million twice in a week for violating India's antitrust laws.

In May 2022, India froze Xiaomi's RMB 4.8 billion deposits on the grounds that Xiaomi was suspected of money laundering in the payment of patent fees.

In July 2022, India fined OPPO US$550 million for tax evasion.

In August 2022, India accused vivo of tax evasion of 1.89 billion yuan.....

In March 2023, Xiaomi received a fine from an Indian court demanding a fine of 4.8 billion yuan for illegally sending money to foreign entities.

These fines are often given different reasons, sometimes to say that foreign companies have monopolized the market, sometimes to say that foreign companies are illegally sending money, and sometimes that foreign companies are damaging the environment. Moreover, while the British left behind a complete judicial system, the Indians made it very Indian, leaving foreign companies often at a loss.

To tell the truth, it will not be difficult for India to develop in a few short years, after all, the general environment is here. There is a strong demand from all parties to dig up the mines of Indians. However, in order to develop in the long run, we must always give a good legal environment.

The second constraint on India's economic development is that there are too many differences between states, so the current economic development is only concentrated in a few states with relatively clear judicial systems. It is much more difficult to build a unified market than his northern neighbor.

The top four states in India are: Maharashtra, Tamil Nadu, Gujarat, Karnataka.

The basic characteristics of these states are the same: a good industrial base, a well-developed infrastructure, a large skilled workforce, and a decent business environment.

There are more than 100 ethnic groups and more than 1,600 languages in India, and language barriers between different states are common. Each of these states has its own laws, its own language, and even its own ethnicity. In the past few years, there have been frequent incidents in the southern states where there is no reason to set up barricades, and there are "countries within states" everywhere, but a large country cannot form an overall advantage, but is more like a big platter.

India's public transport has been underperforming for decades, largely to blame.

Other issues such as caste, women's rights, universal education, quality of work, and infrastructure issues that require a long-term effort are huge obstacles to India's economic development.

Take a look at the following qualities, the road to be taken in India, a bit long:

At a time when global capital and industry are shifting, it remains to be seen how far India can go.

Of course, on the other hand, India, which has not yet fully joined the global economic cycle, may also be less affected by the global economic depression and turmoil.

Sometimes economic development is like this: if Seon loses his horse, is it a blessing?