India Continues to Invest in Technology | ETF Trends

India is planning to spend $30 billion to overhaul its technology industry as part of a plan to build a complete supply chain ecosystem. Gourangalal Das, director-general of the India-Taipei Association, told Nikkei Asia that the investment initiative is aimed at increasing local production of semiconductors, displays, advanced chemicals, networking, and telecom equipment, as well as batteries and electronics.

Roughly $10 billion of this $30 billion investment initiative will go toward two chip facilities and two display plants. About $7 billion is planned to be given to the electronics industry. The remaining $13 billion will be reserved for “affiliated services like telecom, networking, solar photovoltaic, advanced chemistry and battery cells,” Das said.

The country’s top diplomat to Taiwan added that India has a deep bench of “young talent” in the tech sector and is enjoying a “demographic dividend” that could last till 2050. India has set a target of producing 85,000 highly qualified engineers in 10 years.

In 2015, the government launched its “Digital India” campaign to accelerate the country’s economic growth by pushing government and banking services online and by investing in technology. The pandemic has accelerated this trend.

India is on track to being the third-largest country in terms of GDP, with $10.8 trillion projected in 2031. By 2030, the country’s working population is expected to cross 1 billion, the largest in the world. This would also lead India to have nearly 800 million digital content users by 2025.

India is the second-largest exposure in EMQQ Global’s Next Frontier Internet & Ecommerce ETF (FMQQ) and the entire focus of the India Internet and Ecommerce ETF (NYSE Arca: INQQ).

“India is a significant part of our strategies. It’s our second largest exposure in FMQQ with a weighting over 16%,” said Kevin T. Carter, founder and CIO of EMQQ Global. “That is expected to grow in our upcoming rebalance and for the foreseeable future.”

Carter added that India is also “one of the most exciting pockets in global equity landscape when you consider the size of the market, the growth in the economy, and the very low penetrations rates. It’s tech ecosystem today is where China was 10 years ago, and where the U.S. was two decades before.”

FMQQ is designed to provide investors with exposure to the internet and e-commerce sectors of the developing world. FMQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index.

Meanwhile, INQQ intends to capitalize on India’s rapidly growing digital and e-commerce sectors. INQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the India Internet and Ecommerce Index.

Both funds have an expense ratio of 0.86%.

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