In this episode, I speak with Angus Shillington, Deputy Portfolio Manager at VanEck about India’s digital transformation and what it means for their economy and markets.
Disrupting the Analog Economy
What’s happening in India that has Angus excited? I start the podcast by talking about the phenomenal returns India-equity ETFs have seen over the last year and question whether that’s just about the market’s recovery from a COVID induced sell-off or, if there’s something else investors should be paying attention to.
India has long been a country of massive potential for investors with a very large and young population. Angus talks about the bottlenecks that have hindered India’s full potential and some of the ways the Modi government has sought to improve things like identification, affordability and its intention to crush lack of transparency and corruption. The upshot of this is improved taxation collection ability and real economic activity that then leads to better employment opportunities and better infrastructure.
Digitization is the backbone of these efforts and it spans all sectors of the economy. Angus talks about how Reliance Industries, a large energy company, is transforming itself to meet the communications needs of the country but also how very few existing analog businesses will actually be able to transition to a digital framework. Consider the impact of a massive youthful population, many newly connected to the system via mobile phones and the latest technology. They will become a new group of digital natives that will influence and support new business models that leapfrog over analog legacy systems and processes. As Angus stated during our discussion because of the demographics, the sheer size of the population and “the disruptable analog nature of that economy, the opportunity is incredibly broad”.