India makes a significant impression in Davos, seeking investor interest
In Davos, Switzerland, the WeLead Lounge on the Promenade highlights India’s female leadership, while the India Engagement Center promotes the country’s growth narrative, digital infrastructure, and expanding startup ecosystem.
At the forum, Indian technology and consulting giants such as Wipro, Infosys, Tata, and HCLTech are actively presenting the country’s expertise in crucial technologies like artificial intelligence, a topic dominating discussions.
After surpassing China in population last year, India is now heavily promoting itself at Davos, highlighting its rising status as an innovative nation and a global business hub among some of the world’s wealthiest and most influential individuals.
“India has a substantial presence, securing prime locations on the main promenade for tech companies,” said Ravi Agrawal, editor-in-chief of Foreign Policy and former CNN India bureau chief, during an interview with CNBC at Davos. “With China’s economic deceleration, India’s comparatively rapid growth emerges as a distinct opportunity for investors seeking positive prospects at Davos.”
China experienced a 5.2% increase in gross domestic product last year, a rise from the 3% in 2022 but a decline from the 8.1% recorded the previous year. In contrast, India’s growth was 7.2% in the last fiscal year, a decrease from slightly over 9% the year before.
India is progressively positioning itself as a more influential player on the global stage, particularly in the realms of technology and business. States like Maharashtra, Tamil Nadu, Telangana, and Karnataka are individually represented at Davos, asserting their roles as technology hubs for both manufacturing and artificial intelligence.
“In that regard, the individual state pavilions convey a message — different regions in India are vying with each other to provide global companies with optimal access,” commented Agrawal, a Davos attendee for over a decade and the author of “India Connected,” a book tracing how smartphones contributed to a more connected and democratic India.
India still faces plenty of challenges.
Typically, India experiences more emigration than immigration, as per World Bank data. In 2021, net migration exceeded 300,000. Simultaneously, the rupee has significantly depreciated against the dollar, influenced by elevated U.S. interest rates and fluctuating oil prices.
According to the International Trade Administration, a significant challenge in conducting business in India is the “price sensitivity” observed among both consumers and businesses.
“The perennial challenge is whether India can streamline the business environment and if the domestic consumers can contribute enough spending to justify sustained global investments,” remarked Agrawal.
Seeking foreign investment
Nevertheless, foreign direct investment has witnessed a significant surge in recent years, rising from $36 billion in 2014, when Prime Minister Narendra Modi assumed office, to $70.9 billion in 2023, as reported by digital media publisher Visual Capitalist, utilizing data from the Reserve Bank of India and S&P Global.
Dell+, HP+, Lenovo, and other prominent manufacturers are pledging to produce their products within India, participating in the country’s production-linked incentive scheme.
Apple stands out as a major U.S. company actively shifting its production away from China and opting for manufacturing in India to prevent potential supply challenges with critical products like the iPhone.
In the previous year, Apple inaugurated its inaugural store in India, underscoring the significance of the market for the iPhone maker’s future. Situated in the bustling city of Mumbai, the store is named Apple BKC.
During the company’s most recent earnings call in November, Apple CEO Tim Cook emphasized, “We achieved an all-time revenue record in India” in response to an analyst’s inquiry about the company’s momentum in the country. Cook highlighted India as an incredibly exciting market and a significant focus for Apple, noting the ample growth potential with a low market share in a large market.
India is actively promoting investment from U.S. chipmakers, exemplified by hosting SemiconIndia, a significant semiconductor industry event last year. U.S. chip producers were invited to showcase their existing investments in India and unveil new ones during the event.
AMD, aiming to compete with Nvidia in the AI chip market, has revealed intentions to allocate approximately $400 million for investments in India over the next five years. This includes the establishment of a new campus in Bangalore, slated to become the company’s largest design center. Concurrently, Micron has declared its commitment to invest up to $825 million in establishing a semiconductor assembly and testing facility in the state of Gujarat.
Jack Hidary, CEO of SandboxAQ, employing AI and quantum computing technology in fields such as cybersecurity and drug discovery, noted that India is experiencing a rapid embrace of technology driven by inefficiencies in healthcare and other fundamental public services.
According to Hidary, AI presents a chance for India to distinguish itself from the crowd.
Jack Hidary remarked, “This transformation surpasses even the impact of the mobile phone.” Comparing it to the period when the U.S. and China invested in mobile infrastructure, he noted that “almost everyone in those countries quickly got a smartphone and had access to the web and to apps.”
However, he highlighted that “600 million people in India out of the 1.3 billion still don’t have a smartphone,” but emphasized that this is on the verge of change. Hidary mentioned that Mukesh Ambani’s smartphone company Jio, through a $12 device, will cater to around 600 million people in India. He noted that Ambani and a few other services in India are set to bridge the digital gap in the next three years. Overall, India is making a substantial effort at the event because its leaders are aware that it’s a moment of significant transformation, according to Hidary.
Big year for India
India is gearing up for significant developments this year, including general elections scheduled between April and May, where Prime Minister Modi seeks reelection.
During Modi’s leadership, major U.S. tech companies like Alphabet, Meta, and Amazon have made substantial investments in India. For instance, Amazon injected $2 billion into the country in 2014, followed by an additional $3 billion in 2016. In 2018, Walmart acquired the e-commerce company Flipkart for $16 billion.
In 2020, Meta invested $5.7 billion in Jio, the digital arm of Mukesh Ambani’s Reliance Industries, and Google subsequently poured $4.5 billion into the company.
As India rises, China faces challenges on the global stage, particularly regarding access to key technology, with the U.S. leading efforts to isolate the second-largest economy. China has encountered difficulties importing advanced chips from U.S. companies like Nvidia, Intel, and AMD.
Ian Bremmer, president and founder of Eurasia Group, highlighted that India has a strong chance of further strengthening, primarily due to its democratic system. He emphasized India’s stability, popular leadership, upcoming uncontroversial elections, and robust economic growth. Bremmer contrasted India with the U.S., noting its decentralized nature with states competing for investment. He envisioned individual U.S. states adopting a similar approach in the future, with Texas excelling in fossil fuels and sustainable energy, while California could do the same.