India’s pragmatic thinking, when it comes to diplomatic relations, will be a key macro driver for India’s growth, according to the Samir Arora-led Helios Capital. Arora cited the opinion shared by former US secretary of state Henry Kissinger, who spoke about how the US should learn to be more pragmatic, focusing on leadership and renewing their political leadership, to cement his point.
In a May 2023 interview with Kissinger, The Economist had said that India was Kissinger’s model for pragmatic thinking. Kissinger had recalled about meeting a senior Indian administrator who explained that foreign policy for a country should “be based on non-permanent alliances geared to the issues, rather than tying up a country in big multilateral structures.”
Also read: Why Samir Arora’s Helios Capital follows an EI, not AI approach to investing
Advantage India
Geopolitical relations, is an advantage for India with the “well-executed diplomatic offensive of the current government”, especially in this increasingly bipolar world, said Helios in its investor guide. It also said that India’s focus has been on building strategic relationships with these countries. As countries like China and USA compete for technological and economic leadership, the US does not view India as a threat, but instead sees it as a “potential counterweight to China”. At the same time, India has been able to maintain a good relationship with Russia. While being a counterweight to China and amidst various geopolitical issues, the guide says that India has been able to continue to do business with China, “where the intent will increasingly be to make the business exchange more advantageous to India than it has been in the past.”
Also read: Samir Arora-backed Helios AMC’s first equity fund: All you need to know
According to Helios Capital, India has traditionally been a bottom-up driven market, with returns traditionally delivered on the back of secular growth in its economy and earnings of companies. But, this is now changing. India is now entering a phase where both India-specific micro factors such as secular growth, quality of growth, quality companies are aligning with macro factors like demographics, pivot from China, supply chain transitions and infrastructure development. This should provide a tailwind for growth and deliver outsized market returns from India in the coming days, according to Helios.
Megatrends
According to the report, while India has been a volatile market for a long period of time, it has compensated those investors better “who have kept faith through turbulent times”, especially as India’s turbulent times have declined over the recent years. Apart from geopolitics, the report highlights various other megatrends that have been driving returns in India such a high GDP rate making India attractive to foreign investors (especially those looking towards China for investments; a hardworking demographic and investment in infrastructure.
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