In the previous part of the article "Opportunities in Emerging Markets", we talked about the Internet economy and digital transformation in Southeast Asia and the opportunities that this transformation generates in the digital sector, considering Southeast Asia one of the most promising emerging economies. In this part we will talk about "India", which is the second largest emerging economy in the world after China.
One of the factors that will help create opportunities in “India” is the expansion of infrastructure projects, especially in the health care sector, as “India” has suffered from weak spending on the health care sector for many years and is now working on trying to overcome the slow expansion In the health care sector because of historically low spending on this sector.
At the end of 2018, healthcare spending in India was 1.1% of GDP, which is considered to be a very low rate. To put things into perspective, the chart below compares government spending on healthcare in India compared to other countries' averages by income.
To address the shortcomings in India’s healthcare sector, the Indian government has worked on several initiatives to boost investment in the sector, as the Indian government pledged to raise healthcare spending from 1.1% to 2.5% of GDP by 2025.The government has developed a National Health Protection Scheme to provide health insurance for nearly 500 million people in India with support of from the government . The growing interest by the government in the healthcare sector may put the sector at the forefront of the fastest growing health sector in the world in the coming years. If the insurance plan is implemented as is, the sector's total revenue is expected to increase at a compound annual rate of 18%.
Medical equipment: $2.1 billion
Hospitals and clinics: $6.7 billion
Medicines and pharmaceuticals: $16.5 billion
The interest of the Indian government in the development of the health sector reflected positively on the sector's total revenues. The graph below shows the sector's total revenues over the past several years and the expected revenues for the coming year.
Another sector that offers attractive investment opportunities due to the sprawling population in India is the real estate sector. In the 8 largest cities in India, the housing deficit between supply and demand has reached more than 3 million real estate units. To speed up the development process in the real estate sector, India has allowed 100% foreign investment and ownership in the real estate sector since 2018. Some economic analysts expect that the size of the real estate market in India will reach $1 trillion by 2030 as the third largest real estate market in the world.
Real estate sectors that India allowed foreigners to own:
- Residential Projects
- Commercial Real Estate
- Roads and bridges
Finally, investing in India or any of the other emerging economies represents attractive investment opportunities for those looking for investment opportunities capable of accelerated growth in the coming years due to the scarcity in various sectors in emerging markets, but at a higher risk due to the risks that may arise due to the nature of these economies and the legislation of these Countries that may suffer from commercial or political instability and other reasons as well.
(Investment in these markets is not guaranteed returns. You may lose all or some of your money when investing in high-risk investments)
Sources:
Regulated by the DFSA
Past performance is no guarantee of future results. Your investment can fluctuate, so you may get back less than you invested. Consider each product’s risk(s) before investing.
Baraka is not a financial adviser and therefore does not provide financial/investment advice. Our content is informational only.
