OMERS says India’s growth potential is underestimated

Canadian pension fund OMERS' APAC head Ashish Goyal says policy support and accessible inroads for foreign direct investment make the country an attractive investment destination.
OMERS says India’s growth potential is underestimated

“I'm going to say something that's not going to be controversial which is that we are very excited about the long-term potential for India,” said Ashish Goyal, executive vice president and head of Asia-Pacific, Ontario Municipal Employees' Retirement System (OMERS) at the 10th Milken Institute Asia Summit in Singapore.  

Ashish Goyal,

While India is widely recognised as an attractive destination for investment—particularly as more companies look to diversify their production and supply chains away from China—Goyal believes that investors might be underestimating the potential for the country’s significant economic growth to continue over multiple decades.

“For many of the emerging markets in Asia, and even the developed markets, there's lots of scope for additional growth and additional strengthening of the economy, however, policymaking often gets in the way,” said Goyal.

While every government in the region talks about the ease of doing business and their goal of attracting foreign investment, more often than not, investors find themselves halted and overwhelmed by the bureaucracy of many of Asia’s markets.

However, there has been some hard evidence that India is making progress in these areas, according to Goyal.

“India's really moving forward quite dramatically,” he said, highlighting the governments’ success in bringing digital access to the bottom half of India’s massive population.

However, Goyal said that the government will need to continue to deliver on its policies for India’s growth potential to jump higher than the current 6% range, in a non-inflationary way.


Speaking on the same panel, Amol Gupte, head of South Asia and ASEAN at Citi agreed that the potential of India and Southeast Asia may be underestimated.

“The whole geography of India and Southeast Asia together is about 2.6 billion people, that's one in every three people on the planet and they have a very low median age at 30.” said Gupte.

“While foreign direct investments happen differently across these countries, I do think that they've got secular upsides for a couple of decades, if they get it right. However, there could be issues along the way,” he said.

Amol Gupte,

The panel also agreed that some of biggest risks facing Asia were likely to be geopolitical, and Gupte thinks that the precarious situation of India is often overlooked when this topic comes up.

“When you say geopolitics, people usually think about the Taiwan Straits and China. But I think it's more than that. You know, we don't often talk enough about the fact that India doesn't have the best relationships with multiple neighbors,” he said.

Although the prospect of a real kinetic war may seem unlikely at the present moment, India’s strained relationships and close proximity with many of its neighbors could lead to small misunderstandings escalating quickly, said Gupte.


OMERS’ Goyal leads the investment activities of the Canadian pension fund in Asia as it looks to capitilise on the growth potential and diversification benefits of the region.   

With a $90 billion (C$121 billion) global portfolio, OMERS has around 10% of its assets in Asia, which the fund aims to grow to 15 to 20% in the next few years.  

“We will get growth from many markets in Asia—it's not just one story, we are already very active and big in Australia and India is a focus market for us, but quite honestly, there's just so many opportunities in Asia,” said Goyal.

The fund engages extensively in Asia’s public markets to capitalise on liquidity. OMERS' property division Oxford is also actively operating in Asia, where Goyal sees substantial potential even in the office sector, despite prevailing challenges.

“When you look at the story in some markets like India, global MNCs are setting up very large operations in India, like global development centers and global R&D centers. So, it's not just backend jobs, these are the front-end engineering jobs and there is huge demand for high quality office space.”

“Infrastructure remains a big vertical for us, there are load of opportunities,” he said.

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