Jonathan Yates: India is becoming the General Electric (NYSE:GE) of countries, producing chief executive officers of companies such as Mastercard (NYSE:MA), PepsiCo (NYSE:PEP) and Citigroup (NYSE:C).
General Electric used to be renowned for generating so many chief executive officers from its ranks. A recent article in Timemagazine by Carla Power, “India’s Leading Export: CEOs,” detailed the number of chief executive officers coming from the world’s second-most-populous country (1.2 billion). These include Ajay Banga of MasterCard, Indra Nooyi of PepsiCo and Vikram Pandit of Citigroup, among many, many others.
Just as the ladder of corporate ascension made General Electric such a great investment for so long, so too will the culture of achievement in India.
As Power’s article points out, “competition starts early in India.” Reportedly, students start preparing for an entrance exam at age 7 that is given a decade later. ”When the current crop of CEOs came of age, it was typical for 300,000 applicants to vie for 2,000 places.”
Competition for entry in technical programs is particularly fierce.
Economic liberalization began in India in 1991. The country has progressed a long way in the past two decades. There is still a longer way to go, which means many investment opportunities.
Not everyone from India will become a corporate chief executive officer. But the same culture that produces so many successful c-level executives will churn out successful business people at all levels. That is where, stage left, the investment opportunity enters and where ETFs like iShares S&P India Nifty 50 Index (NYSE:INDY) may deliver surprising upside.
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