Huge potential for investment in India
Only 51% of Indians brush their teeth.
There are about 1.4 billion Indians. That means about 559 million of them don’t use a toothbrush.
A dentist might get excited about this because it means a lot of plaque-ridden teeth. As an investor, I see it from a different angle—an opportunity to profit.
That’s half a billion potential new customers for companies selling toothbrushes…or offering dentistry in India.
Five hundred and fifty-nine million people—more than twice the population of the U.S.
Is the light bulb switching on yet? Can you see the enormous potential for companies that can deliver basic consumer staples to the millions of Indians joining the ranks of the middle class each year?
We’re talking huge numbers. McKinsey estimates that by 2025 India’s middle class will reach 600 million people—40% of the population.
This stampede of new consumers is already flexing its consumer muscle. In the year to March 2009 India added 125 million mobile phone subscribers. And Indian car sales—although still dwarfed by China—are up about 40% over the last year.
Imagine a U.S. or European company being able to boast such numbers.
The mainstream media hasn’t caught up with the India growth story yet. Most pundits are fixated on China. This is a mistake.
You see, India has three crucial advantages over China as a great place to make money over the next couple of decades.
1) It has a far more developed political landscape—India is the world’s biggest democracy. China, meanwhile, is the world’s biggest dinosaur. It is a centrally planned economy run by Communist apparatchiks. The last time we saw anything on its scale was in the days of Stalin.
2) India has a far more stable long-term population growth—India’s population is expected to grow from 1.08 billion to 1.63 billion people by 2050. China’s population is forecast to reach 1.44 billion people from 1.3 billion currently.
3) Indians speak English (for the most part, at least)—Try reading a company report in Mandarin or Cantonese. See how far you get. Most business in India is done through English. This gives investors in India a much better chance of understanding the companies they invest in.
Of course, investing in India can be complicated. You could hop on a plane to Mumbai and talk to a broker over there. But that could be a lot of hassle.
At Bonner & Partners Family Office, the wealth protection “club” set up by IL’s founding publisher Bill Bonner, we’ve made it a priority to understand the opportunities in India. Bill visited Mumbai earlier this year.
And we have a strategic partner based in Mumbai who has been invaluable—it’s no wonder our members banked profits of 54% on one of India’s strongest companies in March.
