India the giant that is always on the verge of awakening

Thirty years ago, I thought it was the time for India to wake up, a giant of which I thought I saw signs of awakening. I was wrong. A decade ago, I wanted to find another sign of it and I was wrong again. Now different experts in economic and geopolitical areas see it near or even close. In the past decade the information obtained has allowed me to close my cycle of opinion on the development of India and therefore as a focus of investment and the reason to believe it or notin this vast country both in size and people I have found, obviously in a multitude of factors, but especially in one, which curiously usually distinguish those who are successful from those who are not.

By Miguel ÁngelTemprano

February 13,2023Reading time: 3,50min

I have been thinking about writing this article for many years and if you keep reading you will understand why. About two weeks ago I read an article by an economic strategist -I don’t remember which investment bank, but I think it doesn’t matter for all intents and purposes- who said that in two decades India will be the new China.

A few days ago, I was listening to a magnificent geopolitical intelligence analyst who positioned India as the new China, but no longer in economic terms, but in terms of influence and not in twenty years, but in less than two.

I have an opinion, but if you are interested in knowing it, you will have to keep reading.

I am not from the internet era, not even the computer era. When I started working, we used typewriters and tracing paper, if I wanted to have a copy of what I wrote. That means that I used to read newspapers on paper, the kind of that were not only uncomfortable to read, but also stained your hands with ink.

«The way of analyzing situations is usually generated when one begins to mold one’s brain and mine began in the time of paper».

Every time I went to a new country the first thing I did at the airport was to look for a newspaper in a language which I understood, so since there was no Spanish, it always had to be in English.

I will never forget the first time I went to Seoul. I was picked up by an executive of the company I

was going to visit and he didn’t ride me in the world’s largest car, as it used to happen, in a coach. He took me on the subway. From the subway to a five-star hotel of phantasmagoric bill -that I paid-.

Well, in that newspaper I saw that, even though the pages of the stock exchange were more than seven, the companies or conglomerates of these values were really five. Some or almost all of them we already know here as Hyundai, LG, Samsung….

I learned that economies can be leading and comply with the principle of diversification, but when it comes to seeing where they are going, you have to look at whose hands and how many are in whose hands.

India has been a frequent destination in my life, although the only nice trip of all has been the one on vacation with my wife, precisely wherethere is no business, which curiously focuses on two areas, large, very large, but at the end of the day two, Bombay and Bangalore.

India in industrial terms is so vast that among other things it has the largest vaccine factory on the planet (which was derived from a horse semen factory) or the three largest generic drug factories in the world (now they are not afraid to get a tetanus shot or have a paracetamol).

The development of the technology industry is in Bangalore, and it has reached such a point that it has even lost a point of competitiveness.

«Despite India’s size, its production facilities are too concentrated around Bombay and Bangalore”

More than a decade ago, a good American friendand akey manager of a French multinational company told me that he no longer outsourced software development to India, but to countries of the former USSR. The obvious question I asked was why, and the answer was that they were already so expensive that they were only of

interest when the number of hours contracted was gigantic. I couldn’t get over my astonishment. Yes, he was a mega multinational that hired hours and hours of specialized work. At that moment I thought, I have been wrong for twenty years, but now it is time for India. They are already a real monster. I was wrong again.

Like you, because you are reading me, I like reading a lot and I read everything, and although I have favorite subjects,I always read something different. In this case it was my wife who recommended me a book, one of those that I would not read on my own, “Indian Passion” by Javier Moro a Spanish writer. The book introduced me to an India not known to me, obviously because of the time, but also because of the scenery. As I was late in reading this author, Javier Moro published the next one quickly and I also read it, “The red sari”. A totally different book from the previous one, but much more of interest to me. Before continuing, I highly recommend both.

The red sari is a book banned in India and only because it tells the story of the Gandhi family – that of Indira Nehru’s daughter Indira – with a central focus on the Italian girl married to Indira’s pilot son.

In the book I discovered an unknown India to me.

I was and am a businessman, for better or worse. Very analytical, but too focused. What I’m not interested in, I don’t care about, and Bombay is the perfect place for that. If you don’t focus, you get scattered and end up being like a kid in a candy store.

«Mumbai is the worst place in the world to do business, if you don’t concentrate you see opportunities in every corner»

As a result of reading this second book, I proposed to my wife that we go on vacation to India, but to India because of my unknown and not because of space, because, in addition to being immense in size, between the north and the south is like going from white to black, going through all the gray scales, both in languages, in color, in languages… Except for one thing, and this is the most important, in how most people interpret life.

We took a trip to Rajasthan designed by an Indian for me. Impressive, but since at that time I still thought, I could trek to the Everest base camp, I asked him if he wanted to see Kathmandu. There he told me that he could not help me, but that he did want to understand better what he was telling me, he recommended that instead of traveling from Varanasi to Kathmandu by plane, we go to the Nepalese border by car and later to whatever we wanted.

They were 20 days of immersion in something that has helped me to close the cycle of understanding the country.

India is a country without a common language. Only 10% speak understandable medium English and no more than 30% speaks the official language of the country, hindi. But it is that there are more than 20 official languages that not all the people in the area speak. Their literacy rate despite all attempts, at least published, is ridiculous and the power of families is such that Korea is a joke. And so that nothing changes, they have an officially prohibited and socially institutionalized “caste system”. Two parties freely manage a subcontinent with such heterogeneity that nobody knows how to find the glue that will make the country take off.

“A country without a common language or ethnicity needs a different glue than the one other countries use to advance”

To be a true power, a country needs several factors: size, natural resources, population, but above all one, spirit.

China has grown so fast as soon as they have opened the doors to their economy, because of the spirit of improvement of the Chinese. The Americans brought that spirit from home, first the English colonists, then the Irish and finally the immense arrival of immigrants from other countries hungry for improvement, which made it what it is today.

India lacks that. It has good people. Their companies are leaders. They have a huge cheap labor force, but they lack that massive self-improvement spirit that makes a country grow rapidly.

What I am going to say is very controversial and perhaps politically incorrect in these times, but I am like that. The Hindu religious concept implemented in most of the population and above all misinterpreted, of being satisfied with what you have, prevents and will prevent that giant I bet on 30 years ago one day, at least in my opinion, from waking up.

It doesn’t matter if the social system changes, because it is impossible; it doesn’t matter if a way is found to make all Indians feel like brothers and sisters; it doesn’t matter if they all speak or

understand the same language; it doesn’t matter, as long as the philosophy of life anchored in religious principles of being content with what you have doesn’t change, India will always be the sleeping giant that never wakes up.

It will be important, perhaps even very important, but never decisive in the world geopolitical panorama and therefore in its economy, beyond the volume it represents.

To be an economic powerhouse takes more than cheap labor and crazy innovation. It takes the drive of an entire country, something that demands you to be better than your parents and strive to make your children better than you. And that doesn’t happen in India. The rich don’t care and the worst thing is that the poor don’t care either.

So when you invest in India, don’t do it in the heat of the opinions of apparently expert bankers, do it from the hand of Indians who live in India. Only they know the reality, the rest of us can’t even imagine it.