Sovereign (Abu Dhabi) Limited
Future is Prosperous, Future is India
By Vikrant Pangam
Sovereign Group, Abu Dhabi Office
After spending my last May weekend in Mumbai, I can vouch for the fact that the times have indeed changed. You now see Rolls Royce and Ferrari dealerships on the drive from the Mumbai airport in the middle of huge infrastructure development along the road. Today, meetings in India may take place at a posh club or restaurant in open view or in the client's Class A office building, and clients might drive the latest Bentley.
And there is a new focus on discussing tax-effective investment strategies to enable foreign joint venture partners to participate in the attractive investment returns in India.
India constitutes one of the world's fastest growing economies and, not surprisingly, has one of the fastest growing 'millionaire' populations. According to Wikipedia, there are 69 USD billionaires among the top wealthiest 100 families in India.
The Hindustan Times estimates that India's total wealth has tripled to USD3.5 trillion over the past decade, against the global growth rate of 72 per cent and overall wealth pot of USD195 trillion (defined as investments plus real estate less household debt). India is expected to further grow its wealth between now and 2015 to USD6.4 trillion, according to the Credit Suisse Global Wealth Report. And, if the luxury auto industry is any measure of spending power, Mercedes had its largest single order ever in 2010 for 148 vehicles from the city of Aurangabad, 300km northeast of Mumbai. Mercedes now looks for 25 per cent year-over-year growth from such Indian cities.
What also makes India different from, say, China is the wealth impact of the Non-Resident-Indian (NRI) market. According to a study by Datamonitor, there are more than 20 million NRIs worldwide, with 6.2 million located in 20 key countries, with wealth estimated at well over USD1 trillion.
The India Diaspora is spread across all continents, and Indian families are some of the world's most savvy business traders. Indian business owners have a track record of entrepreneurial success, probably second to none, and it is common for Indian 'business families' to have bases in India, Dubai, Singapore, Hong Kong, America and Africa, where the family operates a range of diverse enterprises, with family member-managers locally settled. This situation is fairly unique when compared with non-Indian business families, who typically own a single business or operate in one industry only.
The Indian economy has made a 180-degree transformation over the past decade from a struggling, segregated 'have-not' economy, to a buzzing, modern, prosperous market within the admired BRIC (Brazil, Russia, India and China). This success has not gone unnoticed, and has made the Indian community one of the most coveted targeted segments for all banks, investment houses and financial intermediaries.
India is a very high-potential market for the use of domestic estate and succession-planning solutions. With the growing complexities within wealthy Indian families, and their international business succession-planning needs, the onshore Indian community offers one of the most attractive future markets for Financial Advisors.