India: The World’s 5th Largest Economy. A Jim Rogers favorite.
India – The next great international investment destination?
"Success depends upon previous preparation, and without such preparation there is sure to be failure."
— Confucius (about 551 - 479 BC)
The above quote by Confucius is chosen as the quote for this week’s article as it highlights how important preparation is in the life of a successful investor. When you watch a Wall Street movie, trading is portrayed as this exciting activity akin to a car chase or a helicopter chase in one of Tom Cruise’s Mission Impossible movies.
The truth, though, is less exciting. To many investors, successful investing feels more like a combination of watching paint dry and chess. It is a slow, deliberate, planful act with a lot of research, a few exciting moves, and if everything goes well, a great payout – financially and emotionally – at the end. In the meantime, it is researching, preparing, and waiting. And striking when the opportunity presents itself.
Investing in India is such a topic; an exciting investment opportunity, a favorite of legendary investor Jim Rogers, and a new, unknown global superstar that hasn’t gotten much media attention, although it surely deserves it.
Legendary Investor Jim Rogers on India
One of the most internationally minded legendary investors—Jim Rogers—has been a long-time investor in China. His daughters speak fluent Mandarin, but now he is more focused on India as the next great international investment destination. In March 2025, Jim Rogers said:
“I’m optimistic about India for the first time in my life. I've been optimistic at times in India and China before, but now I really think that the people in Delhi understand that you have to have a sound economy and prosperity.”
“Indian stock markets are not down enough for me yet to buy. You know, the Indian market made new all-time highs recently, so I want to buy India but not yet.”
“Well, you know, market timing is extremely important and difficult. I hope that if market goes down, if prices go down, that I’m smart enough to buy Indian shares. Not yet, but I hope later.”
In a nutshell, Jim Rogers is eager to invest in India, but he expects the stock market in India to come down. And, like the smart investor that he is, he waits until the thing he wants is on sale. No need to rush.
G7 (The Group of Seven) – Then & Now
The world has changed so much since the early 1990s. Back then, the seven largest economies by GDP were the current G7 members: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
Now, that isn't true anymore. If they updated the G7 membership list based on current GDP rankings, China would need to be included (No. 2 GDP), and India would need to be included (No. 5 GDP). Italy and Canada, both founding members of the G7, would need to be excluded as they are not in the top 7 global GDP list anymore.
Based on the latest available GDP from 2023 (as per the table below), Italy is now No. 8. Canada is now No. 10. Based on current performance, neither would qualify to be in the G7 anymore. I am not making a statement against Italy or Canada, both lovely countries. I am just stating that in terms of economic performance (GDP), they are not in the global top 7 anymore.
The latest available global GDP ranking is based on 2023 data and published by the World Bank.
World Bank: Latest Global Country Ranking by GDP
Source: https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?most_recent_value_desc=true
So, if the G7 list were automatically updated, based on economic performance, it would now include two new members: China and India.
The Fringe Finance Report already published a longer article about the world’s 2nd largest economy, China, back in December 2024, titled “China: Legends Are Investing - Are You?” Click here to read more about it.
As shown above, based on the latest available ranking by the World Bank, as of 2023, India is now the world’s 5th largest economy, right behind Germany and Japan. And according to the IMF, India is on track to overtake Japan in 2025, making India the 4th largest economy in the world.
Another important way to look at global GDP ranking is to adjust GDP numbers by purchasing power, as the cost of living varies dramatically by country. For example, a $100,000 annual income buys you a LOT more in India than in the US. Adjusting GDP by purchasing power is called Purchasing Power Parity (PPP) GDP. Based on PPP GDP, India is the world’s 3rd largest economy.
India, G7 Weaponization, and BRICS
Life is funny, and hubris usually comes before the fall. In the 1990s, when cable TV in the US was the way to watch TV, the cable TV industry behaved like it. Unresponsive and providing bad customer service. Forced bundles. Expensive. It became the joke of TV shows. Their attitude was essentially, “We are the only game in town, what are you gonna do about it?” If you wanted, for example, to have cable TV installed, they wouldn’t give a visiting time. You had to wait the whole day.
The classic comedy TV show Seinfeld made fun of this, when a cable TV guy needed to see Kramer (one of the Seinfeld characters), and Kramer made it difficult, very difficult, for the cable TV guy. Payback in a very funny way. Funny to watch for anyone who ever had to wait for the cable TV guy.
The days of cable TV dominance are now, of course, over, as more and more customers stream TV today. That move from cable TV to streaming TV was always going to happen, but extremely bad will, created as a result of the cable TV industry’s bad customer service and bad pricing when it was the only game in town, accelerated – even turbocharged – the move to TV streaming away from cable TV.
Why did I mention the US TV cable industry? Because it is such a perfect analogy for the G7 and BRICS.
Much of the global financial infrastructure, with its global laws and global usage, relies on it being neutral. That used to be the case – more or less – since these systems were established in the aftermath of World War II.
However, as the US dollar and the Western financial infrastructure were increasingly weaponized, countries around the world became concerned.
In 2009, BRICS was founded by Brazil, Russia, India, and China as a response to the perceived dominance and real or perceived unresponsiveness to the needs of non-Western countries by the global financial institutions run by Western countries.
The West could have taken that as a warning call and adjusted its behavior to address the real or perceived concerns of the non-Western countries. That would have been the smart move. However, as is so often the case in geopolitics, if there is a choice between the smart, non-feel-good option (Option A) and the unwise, feel-good option (Option B), Option B it is.
As a response, the BRICS membership list has grown. Currently, BRICS includes 11 members: Brazil, Russia, India, China, South Africa, Saudi Arabia, Egypt, United Arab Emirates, Ethiopia, Iran, and Indonesia. In addition, in 2024, a new category of BRICS association was added, called BRICS partners. As named in the press, they are: Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam (Source: https://commonslibrary.parliament.uk/research-briefings/cbp-10136/#:~:text=What%20is%20the%20BRICS%20and,centrepiece%20of%20the%20BRICS'%20efforts).
If BRICS continues to grow and admits more members, it will not be long before it covers the whole area from Asia (Eastern Russia and China), down to India, all the way over to the Middle East, and Africa. That would, if push came to shove, make BRICS so big that it would be immune to Western sanctions and interactions with the West. I am not saying that this is what BRICS is trying to accomplish, but it would have the capability to do so. That alone changes the global power dynamic. And India is a core member of BRICS.
Source: https://www.statista.com/chart/30672/brics-expansion-map/
BRICS vs. G7 Over Time
Our media likes to belittle BRICS+ as some sort of poor man's club not comparable to the G7. Fair enough, but is that true? Well, in PPP GDP terms (see graph below), the BRICS countries have already overtaken the G7 countries. In contrast to 1990s, when the BRICS were way behind, they are now ahead.
Source: https://www.statista.com/chart/30638/brics-and-g7-share-of-global-gdp/
In nominal GDP terms, the G7 countries are still ahead in terms of GDP ($45.9 Trillion vs. $30.8 Trillion), but the trend is the same – the BRICS countries are on track to overtake the G7 countries, even in terms of nominal GDP, at some point in the future.
Source: https://www.visualcapitalist.com/charted-comparing-the-gdp-of-brics-and-the-g7-countries/
Now, the future is, of course, not set in stone. After all, the future is what we make of it, as individuals and as countries, but the trend over the last few decades favors the BRICS countries, including India.
US Tariffs Reset – China and India
The Trump administration is currently in the process of trying to re-industrialize the US. Now, that may or may not work, but the important point is that this impacts the relationship with China. The time, it seems, when US companies outsourced willy-nilly their production to China is coming to an end.
While the US and China are currently too intertwined for a quick divorce, the economic relationship has clearly cooled. And while some sort of US-China business relationship will clearly continue, the appetite to further deepen the business relationship between the US and China has clearly cooled.
This trend benefits India. During the Biden administration, as the Biden administration was trying to peel India away from China and Russia as part of the Biden administration’s support of Ukraine, India was told to essentially “pick a side.” India responded that it wasn’t going to play that game “for the West” or “against the West.” India’s foreign policy is “Pro India.” That is it. Not for or against any block. That gives India a lot of power from a geopolitical perspective as both groups – BRICS and G7 – try to woo India.
If a repatriation of production facilities to the US is not in the cards, a move to India from a US perspective seems to be a solid Plan B. As a case in point, Apple is considering moving most of its US iPhone production from China to India.
Source: https://www.cnet.com/tech/mobile/apple-is-moving-us-iphone-assembly-to-india-amid-tariff-turmoil/
Now Apple’s decision may change, but even having this conversation shows that India is most likely one of the main beneficiary countries of the current US trend away from China.
Investing in India
Whenever one invests in a different country, it can be difficult. The company names are unfamiliar, and one has many questions. What is available to me as an investor? Where can I buy what? How to invest? What to buy? Among the hundreds of unfamiliar names, how do I pick the right company? What are the special risk factors? What are the special opportunities? And so on. That requires extra research to get everything in place and to get comfortable, so that you can pull the trigger once the opportunities are available at an attractive price.
The rest of the article will cover all that and more.
Let’s take a closer look.