 India is an eccentric country. For the last 20 years, India has been growing at the GDP growth rate of average 6.25%. Even outpacing China's GDP growth for the past decade. Impressive, isn't it? During this time, India has climbed the economic ladder, surpassing countries like Korea, Canada, Italy, France and the UK to become the world's fifth largest economic powerhouse. And guess what? Morgan Stanley predicted that within the next 5 years, India might even surpass Japan and Germany to become the third largest global economy. Tech unicorns have been popping up left and right in India, covering everything from fintech, e-commerce, agile tech to gaming. In fact, even Apple plans to move a quarter of its iPhone production to India. It's like India is on a rocket ride to the top. But hold on a second, despite all this progress, around 10% of the Indian population still live in extreme poverty. I remember visiting India a decade ago and I was shocked to see people just yuring openly in the public and slipping on the streets in the city centre of New Delhi. And based on the last I researched, things haven't changed much. Corruption is another issue that cripples India? So is India economy in good shape or in bad shape? And for investors, is India a viable place to put our money in? Let's find out in this video. To understand where India is coming from, let's take a quick history lesson. If you check out this very interesting graph from IMF, you can see that while countries like US and China have risen economically in recent years, India's contribution only appears as a thin line. But if you move back the timeline and trace the time back in the 18th century, India was actually an economic powerhouse, contributing to a third of the global economy. So what's causing the drop? Well, the Industrial Revolution in Europe played a huge role in boosting the West's productivity. However, for India, British control of nearly 300 years did be the exact opposite. Under the British rule, India's focus remained on agriculture and textile. And there was minimal development in the industrial and technological sector. And this led to a stark contrast in GDP growth between India and England back then. Before that, this video is brought to you by OctaFX, a global broker that offers a wide range of trading options. Whether you're into stocks, commodities, or indices, they've got 230 choices for you. OctaFX Trading App can help you to get super low spreads, and there are no sneaky commissions or swaps into your profits. But wait, there's more. If you're new to all these trading stuff, they've got a lot of educational materials in different languages, from live trading sessions, market analysis, and useful trading tips. Plus, they've got a demo account that you can test out with virtual money. Perfect for practicing without risking your hard-earned cash. They have solid customer service too. Need help at 3am? No problem. Their support team is there 24-7 to answer all your questions. And handling your money is a breeze at OctaFX. Deposit takes just a minute, and withdrawal rolls are under 49 minutes, even faster than your food delivery. So if you're ready to kickstart your trading journey safely, hit the link in the description or scan this QR code to download OctaFX Trading App. My promo code, Aligato, allows you to double your deposit for trading. Now let's get back to the video. After World War II, India finally gained back its independence after the British left. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. But at that time, their GDP had already dropped from 25% to only 2%. That's why after gaining independence, India turned inward. It started to adopt a Soviet-style economic model, with tight government regulations and limited foreign investment. Alright, no more free trade. The government also came up with a licensing regulation called the License Raj. In short, most businesses, no matter what you wanted to do, you had to apply a license from the government. And that resulted in a sluggish economy with inefficiency, corruption, and inequality. Things took a major turn in 1991, when the Indian economy finally went through a major transformation. The collapse of the Soviet Union, India's biggest trade body back then, and some Gulf War drama through India, a big curveball. Imagine losing your main source of income and having the oil price shoot through the roof. It's like getting hit by a double whammy. At that time, inflation skyrocketed and Indian governments soon ran out of cash. They were on the edge of defaulting their debt. So what did India do? They had no choice but to turn to IMF to borrow money. And IMF said, Sure, we will help you out, but only if you promise to play by our rules. And that's when India rolled out its sleeves and went to work. Economic reforms start to happen. They slash the rift, let interest rate flow through open the doors to international trade, even give a big welcome hug to foreign investors. It's like they leak a firecracker under their economics chair, and boom, growth was on a fast track. From 1995 to 2019, their exports were growing at 13% year on year. Ka-ching! Hold up, there is more. The service sector became the MVP of the India's economic rise. Back in the 60s, agricultural was the major contribution to the economy. But now it's taken a back seat while the service sector struts its stuff, making up over half of the GDP. And in this sector, there's one rock star. Outsourcing. India is like a heavyweight champion of outsourcing, responsible for over half of the global outsourcing economy. Big companies like Google, Amazon, Apple, all ship out some of their tasks to India, including technical assistance, software development, customer support, and more. I bet you already had a chat with an Indian support agent before, the throne Indian accent on the other end of the line. Yep, that's the one. So why do all these big tech companies choose India? Three magic words. Cheap, talented, and English speaking. For example, the recent famous open AI, they need a lot of feedback to train chat GPT. If they hire people in the US to do so, it's going to incur a lot of labor costs. So they go to India and hire people over there to do the feedback, and they only need to pay less than $2 an hour. India also got a pool of IT reserves. Their culture and educational system focused a lot on IT training. And as a result, they can develop a pool of IT talents with remarkable intelligence. If you look at some of the top US tech companies, many of the CEOs are Indians. Google CEO, Microsoft CEO, Adobe, IBM, they are all Indians. From there, you can see that India's IT education is truly impressive. And one good thing came up from the British colonial past is they speak very good English. No wonder India became the go-to destination for outsourcing. But wait, there is a twist. While the India economy is booming like a firework show, it's not all sunshine and rainbow. See, India got a massive population, like a really massive, massive population. Although the country's GDP is huge, but when you break down into GDP per person, it becomes so insignificant. In 2021, India's GDP per capita was only $2,600, compared to the US jaw-dropping of $80,000 per person or even China's $13,000 per person. India was a far cry from them. In fact, if you compare to Laos, Philippines or Indonesia, India's GDP per capita is even lower than them. And if you look at the population structure of India, there's something even more interesting about it. When you compare it to countries like China, you will see that India has a younger population with more youth and more children. The median age of India is only 27.6 years, meaning that half of the population is under 28 years old. In comparison, the median age of China and US is 38, Singapore 43, Japan 48.4. So with such a huge population advantage, it should be a strength for India, isn't it? But here is the puzzling twist. Despite of the youthful advantage, the Indian government has been advocating as citizens to delay procreation and in fact have fewer children. These might lead you scratching your head. Why would they do that? Well, it turns out that India is facing a very huge problem. While its population is booming, there's simply not enough quality job to provide to the citizens. Unemployment is a bit of a sore spot with a rate of 7.3%. To put it in perspective, that's higher than China's 4.9% and the US 3.6%. And given India's massive population, the sheer number of unemployed individuals is staggering. You see, for India, adding more people doesn't necessarily equate to more productivity. In fact, it often translates to more mouth to feet and more strain on the country's resources. So what is the root cause of this dire problem? Now let's rewind a bit to understand another piece of the puzzle. While most countries start by developing their agriculture and industrial sector, before diving into the service sector, India kind of skid a step. They jump straight into the service sector, and that leads to a situation where a significant population lacks the necessary knowledge. In an attempt to address this issue, in 2014, the Indian government initiated this Make in India project, and the goal is to transform India into a global manufacturing hub through various incentives and policies. After all, India is famous for its low-cost labour, making it an attractive destination for companies to set up factories there. As a result, it attracted giants like GM and Kia to invest over a billion dollars to set up manufacturing facilities in India. However, the overall result is still rather underwhelming. Despite of the government's effort, many businesses face losses due to low productivity and the E-efficient system, and the percentage of manufacturing in India's GDP dropped from 17% to 14%. Corruption and inequality is also another hurdle according to Transparency International. Around 39% of Indians who dealt with the government reported pain brights. The highest percentage in Asia. The poverty gap is another concern. There are 2.5 million people dying every single day in India. Around 10% of the population is in extreme poverty, and many lack access to basic amenities such as proper sanitation facilities. And that's why urination in the open public space is a common sight in India. But then again, India is working very fast to change this. From 2004, 40% of the population was in extreme poverty. By 2019, the number dropped to 10%. So from this angle, the government is definitely moving towards the right direction. In my opinion, although India has a lot of challenges, there are also a lot of growth potential. Over the past two decades, the Nifty 50 Index, a benchmark for the Indian stock market, has seen an annualized return of 17.5%, reflecting the country's massive economic expansion. The financial service sector, which makes up a significant 37% of the index, plays a pivotal role in driving the country's economy. India is also making a huge progress in digital payments. Currently, digital literacy is more than twice as high in the urban area as compared to the Euro area. A mere 14.9% of rural households have internet assets, compared to 42% among the urban households. As the infrastructure continues to improve and the population becomes more and more prosperous, this could unlock future economic growth. As an investor, if you believe in the future trajectory of India, there are many ways for you to tap into its growth. Firstly, you can invest in ETF that tracks the Nifty 50. In the US stock exchange, the ticker symbol is IMDY. If you prefer a more diversified ETF, you can also consider INDA that tracks 115 top companies in India. And if you know how to do option strategy, you can even consider doing BOSS by selling a pool option on INDA. For example, by promising to buy INDA, I get to collect a premium of 3.4% in just 1 month. And if I manage to get the share, I am more than happy because I personally believe in the long-term growth of India economy. However, if the stock price continues to go up and I do not manage to collect hundreds shares of INDA, the next month, all I need to do is to do BOSS option strategy again to collect another round of premium. By rinse and repeating that, I am able to generate passive income using options as well. If you are new to options and you want to find out exactly how you can do it as well, then you can join us in our upcoming options masterclass to learn it step by step. All you need to do is to click on the link around this video to register for your spot. Recently, I have been reading this book called The Joys of Compounding by Garden Bay and I really learned so much investing wisdom and insights from him. As a fund manager of Stellar Wealth Partners, Garden has a lot of insights into the India stock market. And if you don't want to miss out our upcoming interview, then make sure to subscribe to my channel right now. By the way, the information presented in this video is all based on research I came across from watching various YouTube videos as well as plowing through a lot of data from Google. My opinion should not be taken as an investment advice and it's very important for you to do your due diligence before making any form of investment decisions. If you want to learn more about investing, make sure to check out some of my videos over here to continue your learning journey. In the meantime, don't forget to follow my telegram for more updates. I will see you in the next video. Arigato!