Era of multilaterals over; in this era of bilaterals, India will be counted: Ashish Chauhan

Time of India

11 hours ago

Ashish Chauhan
,
MD & CEO,
NSE
, says India's growing economic importance is reshaping global geopolitics, marking a shift from a multilateral era where it was often overlooked. Now the fourth largest economy with technological prowess, India demands recognition. Post-World War II systems are becoming less relevant as India asserts its influence. If you look at a 20, 30, 50 years' time horizon, there is nothing better than India. On an average, we have given a growth of 6.5-7%. In rupee terms, we have given CAGR of almost 12-13%. In dollar terms we are 1% higher than S&P 500 in those 30 years. So, we have done wonderfully well in the last 30 years.
Everything comes with its share of ups and downs. And that is exactly what the market is. When I met you earlier, at the
National Stock Exchange
, you said that like in a love relationship, markets also experience fights, ups and highs. Where do you think the market is headed next? There are question marks on when the rural recovery will come about even though the RBI has fired all guns. Where do you think the economy is headed?
Ashish Chauhan:
In a way, there are reasons why things happen and overall, the world is softening for a variety of reasons including the tariff war. But the tariff war is an outcome of a long drawn movement away from manufacturing in China and services in India from the rest of the world. In that context, the rich countries of the west are feeling slightly poorer and they are saying that if you want to access our markets, you need to pay tariffs which is, of course, in a way recessionary because it brings down demands and increases prices. So there is going to be an impact of that longer-term trend.
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The second trend which we have not discussed is because it happens over 20-30 years. Life goes through a lot of other noise, and we often do not look at that signal. It is the demographics. The world is becoming old. Other than India, Pakistan, Bangladesh, broadly the rest of the world is getting older. From Japan to China to Europe to the US, it is decisively older demographics, bringing down demand. But it will bring demand up for the hospitals and healthcare and many other things. We need to understand where life is going to go.
The third long-term trend is technology. Technology is the only thing which changes the world. And the technology that has changed over the last 30 years has also changed India decisively. It has made India what it is today. The world power in services, information technology, and it is also going to take India up because of the same reason that the changes in technology are going to come even faster and India is the youngest, highly technology-oriented country compared to our neighbours or other younger nations.
Of course, we are a very large market ourselves. Overall on a scale of 25, 30, 50 years, India has a glorious future. I will say that in a thousand years, when the technology race was run, we were not even in the stadium. Now, we are at the front line and today we have a chance to become rich before we become old because we will also become an older society by 2100. But before that, we should all work hard to become rich.
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Within that, there are geopolitics issues. People who have a lot of money are feeling slightly poorer and have started coming after poorer countries. Those things will continue. We have to mend our ways. We have to ensure that we are good with people who have money, who need us. We learn from them. We bring ourselves up and of course, maintain our dignity in terms of negotiations. In that context, today what we call the era of
bilaterals
has started with
Donald Trump
.
Before that, in the last 50, 60, 70 years, it was the era of
multilaterals
and multilaterals had given very little importance to India. The bilaterals are now a situation where we are being given importance because we are important. Now, we are the fourth largest economy. We are also an up and coming economy. We are a highly technology-oriented economy. So, people will have to give us importance and many times I say that when the new geopolitics is defined, India will be counted. We were not.
When World War II got over and the Bretton Woods was called, our economists also went, but as a part of the British Empire because we had not become independent then. So, for me, the post World War II multilateral systems of World Bank and UN and WTO and every other thing, WHO is now becoming irrelevant in a way because of the way the new situation has evolved.
You were part of the prime minister's contingent to the UK.
Ashish Chauhan:
That tells you that now India is able to kind of ask for each pound of flesh. If you look at a 20, 30, 50 years' time horizon, there is nothing better than India and we have seen it in the last 30 years. So many times, the markets have gone up and gone down, but on an average, we have given a growth of 6.5-7%. In rupee terms, we have given CAGR of almost 12-13%. In dollar terms we are 1% higher than S&P 500 in those 30 years. So, we have done wonderfully well in the last 30 years.
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But in the next 30 years or by 2047, as Modi says as as
Viksit Bharat
(developed India) we would be doing immensely well compared to the rest of the world.
But what is the message for
retail investors
because they get affected by the noise, by all the headlines, and also the lofty valuations. In the long term, there is a reason why India will continue to command that premium, but in the near term, does that work well for retail participants?
Ashish Chauhan:
For me, retail participants are of two types –
retail traders
and retail investors. The retail investors would be investing for the long-term and if they do not have time because they have other jobs and they have savings, they would rather invest through mutual funds or portfolio managers or advisers and things like that because those are experts and they should go through them and not trade in derivatives.
There is a class of people who are basically retail traders who would try to take every signal like what Donald Trump has said about China many times, and they will try to sell or buy. For me, it is not only retail guys who do it, there are professionals also who do it. There are algorithms which pick up all those things now and start trading. But that is what I call trading on the noise.