Next year, India is forecast to be one of the three fastest-growing markets in the Asia-Pacific region, alongside Australia and Japan. This forecast comes from Filippo Gori, JPMorgan’s managing director for the Asia-Pacific region. He believes that India can greatly benefit from the “China plus one” strategy, in which businesses diversify their supply chains by investing in countries beyond China.
India’s potential as a major player in this strategy lies in its ability to absorb a portion of the global supply chain that many companies are seeking to relocate. This is evidenced by the fact that multinational companies such as Apple are increasing their production in India, while others such as Tesla are considering starting production in the country.
As Asia’s third-largest economy, India is forecast to grow by 6.5% in the fiscal year ending March 31, 2024. This growth rate is expected to be the fastest among the largest economies. To attract global companies, India offers various incentives, including tax breaks.
However, Gori points out that there are still areas where India needs to improve. One such area is its infrastructure, which he says is more disorganized and less unified than China’s. While low-end manufacturing may move out of China, high-end manufacturing is unlikely to follow suit just yet.
Despite optimism surrounding India’s potential growth, JPMorgan has seen weak transaction volume in the region this year in mergers and acquisitions, equity and debt financing. However, Gori notes that the level of inquiries and activity is increasing significantly in India.
In the past five years, JPMorgan has added two senior managing directors to its investment banking team in India and increased its commercial banking division, which focuses on mid-caps.
Gori also addressed China’s economic slowdown and market volatility, stating that the bank has yet to see a significant drop in business volume. He emphasized the resilience of the Chinese economy and noted that JPMorgan’s primary customer base, international companies operating in China, has not been affected by geopolitics, but that could change in the future.
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