If you think about the country with the greatest number of people, often times you would think about China, but a new country has arisen – India. The country of India is complex, it is also one of the fastest growing economies in the world, with growth rates expected to increase 6%.

In an article by Alex Travelli of the New York Times News Service, India’s economy is booming, the stock markets is one of the best performing exchanges and similar to China, its infrastructure is changing fast. There is a hitch, investments by the private sector or companies is stagnant.

The goal of Prime Minister Modi is to catch up to China by 2047 and there is a shift in manufacturing from China to India. In addition, if you listen to politicians around the globe, they want to be dependent on China which allows India to step into a big gap.

The World Bank has applauded India’s commitment to infrastructure spending, but it is important after the port is made new, a new industrial park lures companies into building plants and hiring workers.

The stock market In Mumbai are worth nearly $4 trillion up from $3 trillion in 2022.

Foreign investment which averaged $40 billion has shrunk to $13 billion in the past year. One of the reasons is businesses are waiting and seeing what the government will do. Prime Minister Modi’s government is interventionist and sometimes he is correct and sometimes not so good. For example in August, the government announced sudden restrictions on laptop computers. That sent businesses which depend on them in a tailspin and the measure was withdrawn.

If the business is close to the Prime Minister, then regulatory measures seem to help them more often and the 2 biggest examples are the Reliance Industries and the Adani Group.

A factor in holding back the Indian economy is wealth distribution. In a population of 1.4 billion, 20 million are doing very well and consume products, buy homes and autos. Most of the rest of the sector is struggling with food and fuel prices or the lack of robust middle-income group.

The biggest wildcard is whether India can grab a significant share of global business from China. For example Apple is producing iPhone has a 5% market share. Apple builds about 7% of the world’s iPhone’s in India but want to increase that to 25% by 2025.

Linking to dividend paying stocks, companies and countries around the world have tried to gain growth over the expectations for generations. Sometimes it succeeds and sometimes it does not and only government spending is left. It is important as an investor to ensure the fundamentals are in your favor.

There are more questions than answers, till the next time – to raising questions.