Thursday, 22 July 2010

CBC - ICICI Dinner

Last week I had the pleasure of Hosting Ms Chanda D Kochhar, Managing Director & CEO of ICICI Bank for a dinner with leading Indian and British business leaders in London. She made a series of extremely interesting points during her speech.

Firstly it was noted that now was the time for India to take centre stage, that its annual growth rates exceeding 8% put the country at the forefront in the Global economy and that Indians themselves believe it is there time. Ms Kochhar also argued that for the current growth rate to be sustainable over the coming years the Indian banking sector would have to grow by about 20% a year, this would mean the banking sector increasing in size by 2.5 times over the next 5 years.

Ms Kochar also drew an interesting parallel between the western economies and India. She suggested that the while stimulus packages had been needed in the west to preserve growth and stave off recession, in India all the investment is demand led. "as bridges and roads are completed they are filled with traffic" she said. 'The need for infrastructure for a development is currently a real opportunity, but left un-tackled will become a serious bottle neck to Indian growth', she added.

Ms Kochar made one final 'mind boggling' observation, that by 2020 India would be home to 25% of the world's work force. India will continue to benefit from the demographic dividend until 2040, which will be the first point at which the median age of the population exceeds 32, a benefit China does not share. With such a large part of the population in the working age group, India can expect to enjoy a long period of increasing domestic consumption and prosperity.

The strengths of the Indian economy Ms Kochar highlighted, clearly demonstrate just how important India is becoming to the global economy. And indicate the level of opportunity available to the international investor looking to invest.

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