India: Selections for foreign workers in the construction/public relations industry
The largest democracy in the world, which has become a pilgrimage center for tens of thousands of Israelis after the army, has also captured the wallets of local investors, looking for investments in the developing world.
The four local mutual funds that track the performance of the Indian stock market indexes, for example, grew by about 450% on average in the year since last February (see table), and added a total of 417 million shekels to their management.
The largest fund is Kesem MSCI India managed by Kesem Investment House, which is owned by the Phoenix Insurance Company, which manages about NIS 260 million as of the end of February this year after growing by about 330% since February 2023, when it managed about NIS 60 million.
The investors are not entering a vacuum, as a number of Israeli companies have already been operating in India for years, along with others that are currently targeting it. The Aerospace Industry, for example, established a subsidiary in New Delhi in India during 2022, after already in 2017 it reported transactions worth about 2 billion dollars in the country.
Among the other Israeli companies that operate there are Teva, IDE, Natafim, Huolit, Degania Silicon, Avgol, Adama, and Pinergy, which own, among other things, manufacturing plants and research and development centers, in cooperation with local Indian companies.
Last February, it was also revealed in the Indian newspaper Indian Express, that the local chip company Tower Semiconductor is considering setting up a chip factory in India. According to the publications, the cost of its establishment is estimated at about 8 billion dollars, half of which is expected to be subsidized by the country with the second largest population after China.
Indian Prime Minister Narendra Modi inaugurates a Hindu temple in the city of Ayodhya, January 22, 2024/Reuters
The growth struggle between India and China began already in the 2000s, when the former constantly tried to catch up with the gap created by the growth rate of the latter. Thus, while China's annual gross national product growth rate peaked at 14.2% in 2007, India's growth rate for the same year was 7.7%.
However, since 2007 the growth rate of Chinese GDP has been on a downward trend and according to World Bank data, its rate was 3% as of 2022, while India managed to establish an annual growth rate in the range of 6%-9% in the decade before the corona virus, and its rate for 2022 was on 7.2%.
The International Monetary Fund predicts a growth of about 6.5% for the Indian economy this year, which is expected to become the 3rd largest economy in the world in the coming years while being defined by the World Bank as a "significant player in the world economy".
It should be noted that India is still far from conquering the peaks which China is already following. The latter's gross national product, for example, was about $18 trillion in 2022, while India's GDP was about $3.4 trillion.
A breakdown of the countries' data, however, is not flattering to China, and shows the set of problems its economy is currently facing, such as the collapse of local real estate, a decrease in private consumption, the swelling of government debt, and the expansion of bankruptcies.
India, on the other hand, is on the opposite trend with an increase in private consumption, in housing prices, and in local production, and Israeli companies were all the while examining how they too could benefit from the same growth.
Much water has flowed in the Ganges River since the Prime Minister of India, Narendra Modi, and Prime Minister Netanyahu walked together, barefoot on the beach in Olga in 2017, to the sound of explanations by The Israeli professionals on the innovation of the local water desalination facilities.
Whether it was the effect of the joint march of the leaders or the horizon of the sea, India became the seventh largest mutual foreign trade arena for Israel, accounting for 5% of all Israeli exports (the Israeli sales side only) for 2022. The mutual that year was about 8 billion dollars, and about 5 billion dollars in neutralizing diamonds.
The two countries strengthened their relations even more since October 7 with the unqualified public support of the Prime Minister of India to Israel, and India is even going to be an alternate address for the main power The Chinese and Palestinian person who was lost to Israel as a result of the war in Gaza in the fields of construction.
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So what is that secret economic spice that attracts Israeli investors to India? And how does this contribute to us financially?
Roi Shagib, investment manager at Migdal Shoki Capital: "India has not yet overtaken China in terms of its trade with Israel, but the trend of trade between the countries is in constant growth. In recent years, the bulk of Israeli exports to India have come from the fields of technology, medicine and agricultural products, but its development invites opportunities for companies "In addition, there are Indian companies operating in Israel, such as the Tata Corporation, which operates here in the field of development and maintenance of information systems through an Israeli subsidiary, the Reliance Industries Corporation, which invests in Israeli startups, and the
Indian
Adani Group, which cooperates with the Israeli company Gadot, which won about a year and a half ago the tender for the port of Haifa as part of its privatization, with an investment of about NIS 4 billion.
"The main attraction for investments in India revolves around the country's economic data, the strength of which is evident, among other things, in the decrease in the poverty rate, which according to the World Bank's definition is $2.5 per day, from 40.6% in 2004 to a poverty rate of 12.9% in 2021.
"This is a result of The strengthening of the economy which also led to an increase in the proportion of people living in cities to 36%, an increase in life expectancy to age 67 and the neutralization of the period since the Corona virus to 71, compared to age 63 in 2000, and more.
"Additional supporting data that express the strengthening of the economy are the GDP of each Indian worker which was about 2,400 dollars in 2022 compared to a GDP of about 442 dollars in 2000, the drop in the unemployment rate to 4.7% in 2023 compared to 8.7% in 2005, etc.
"All of these are sweeping investors from all over the world to examine investment options in India, including Israeli investors who wish to invest in emerging markets and are looking for an investment replacement for the funds that were previously diverted to China, and are currently in a kind of stagnation."
Roy Shagiv, investment manager at Migdal Shoki Houn/Aliran Avital
The Israeli investors are also strengthened by the basis of trade relations and friendship between India and Israel, and Giv refers to the political arena and mentions that in the coming weeks the election process in India is expected to begin, which will last several weeks.
"According to the polls," says Shagib, "the Prime Minister who has been in office since 2014, Narendra Modi, is expected to be elected for the third time to the position. Modi, who is known for his nationalist positions, is expected to be elected mainly on the background of the economic policy that supports growth that he instilled in the country in the last decade.
"In this aspect, India has more A lot of work to meet the goals that Modi set for the state, and the latter requires the continuation of comprehensive reforms in order to fully realize the country's growth potential.
"The expectation for the near future is that India will continue to grow, and the trade relations between Israel and India will continue to strengthen and expand. All of this is expected to affect both the Indian companies and the performance of their shares on the Indian stock exchange, as well as the Israeli companies and the local economy."
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