Long-term India is really an attractive place but short-term there are some bumps in the road, says head of emerging markets at Hermes Investment Management.
Indian economy is growing a little more slowly than the statistics would have you believe, says Gary Greenberg, head of emerging markets at Hermes Investment Management.
In the latest FTAdviser video interview, Mr Greenburg said despite this there is a reasonable underlying growth from India in the consumer.
Speaking to Investment Adviser’s Ellie Duncan, he said: “Industrial India is quite slow, part of that is due to the state-owned banks having lots of non-performing loans and being undercapitalised.”
Speaking as India’s prime minister Narendra Modi visited the UK he pointed out Mr Modi’s progress has been a lot weaker than most people expected.
But Mr Greenburg added Hermes now expects the state to open up to foreign investment.
Mr Greenberg said: “Officially a lot of things are happening, for example there is a dedicated trade quarter that is being built to make good transportation much stronger, there are Japanease and Korean companies setting up alongside it for manufacturing purposes.
“We’ve had announcements from GM and Foxconn (the world’s largest contract electronics manufacturer) of big factories coming in so overall you do see progress being made although it is not as quick.
“In the long-term India has potential. Mr Modi visiting the UK will get some more foreign direct investment pledges while he is here and so we think long-term it is really an attractive place but short-term there are some bumps in the road.”
lucinda.borrell@ft.com
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