DALLAS-Imagine a marketplace with nearly 1.2 billion consumers and the world’s most rapidly growing middle class; a 22.4-million shortage of residential units; 55 million sf of office space demand annually; and a $258-billion retail sector with a 30% annual growth rate. The gist of the stats is it’s a land of opportunity.

It’s not Dubai and it’s not China. It’s India, an English-speaking, 60-year-old democracy that has reached an economic pinnacle with an annual growth rate of 9% and climbing. Its companies are now starting to buy assets in the US and elsewhere, setting up a two-way street for a fast-track capital flow.

“They’re following a better, more sustainable long-term model for development than China, I think,” Michael Cox, senior vice president and chief economist of the Federal Reserve Bank of Dallas, told yesterday’s crowd at the Greater Dallas Chamber’s US-India Business Forum in the Hotel Inter-Continental at 15201 Dallas Pkwy. in Addison. He pointed out the difference between the two neighbors is India’s headway isn’t strictly tied to manufacturing.

Commercial and residential real estate of all types are in demand, particularly as salaries rise, interest rates stay low and the under-35 crowd that represents 70% of the population become homeowners at an earlier age and major consumers as well. By 2020, the prediction is India will be a tourist destination in South Asia, driving the hospitality sector to start pushing its plans too. “Real estate is red hot right now,” said Ron Somers, president of the US-Indian Business Council in Washington, DC.

Last year, real estate opened up for the first time to non-residents, resulting in $3 billion flooding into the country. Nearly all large US brokerage houses have India shops to keep pace with clients’ demands to get a piece of the action. Just in Dallas/Fort Worth, last year’s regional trade with India hit $484 million.

Dallas-based Brinker International Inc. is planning to open 100 units of its top-branded restaurants in five to 10 years. TGI Fridays already has seven, Ruby Tuesday is up to 13. The push is to introduce casual dining as demographics change in a country saturated by McDonald’s and pizza chains.

HKS Architecture Inc. of Dallas is opening an office at the behest of client planning a massive commercial development which, for now, is being kept hushed. HKS will open the shop in the third quarter in Chennai, one of four mega-hotspots. Mary Kay Inc., also Dallas based, will make its market entry in the fall.

The Bentonville, AR-headquartered Wal-Mart Stores Inc. and France’s Carrefour Group both are negotiating with partners on the ground for their inroads. As foreign retail breaks into the country, Indian kingpin Reliance Retail Ltd. is rolling out a $750-million development pipeline and has earmarked more than $5 billion to invest in the next few years, said Sanjay Chakrabarti, senior manager of the India Tax Desk for Ernst & Young LLP in New York City.

One of the first multi-nationals to break onto the scene was Dallas-based Texas Instruments, which has been on the ground since 1985. Another pioneer, the Shanghai-headquartered AIG WorldSource recently paid nearly $9 million per acre for an 11-acre tract on the outskirts of Chennai for one of its expansion plans. Long-timers Ford Motor Co. and General Motors Corp. also are looking to double their in-country production by 2009–sure to bring bricks-and-mortar expansions. Chevron Corp. and Reliance Petroleum will build a $6-billion refinery at Jamnagar in the state of Gujarat, bringing it on line in 2008. In April 2006, Houston-based Chevron paid $300 million for a 5% stake, but is planning to push its interest to 29%, according to a published account.

“As India grows as an economic power, they’re going to buy our high-end products made here and at home,” Somers said. If cell phone buyers are any indication of the change that’s underway, the pros report there are six million being issued each month to new subscribers.

There is a down side–lack of infrastructure for road, rail, air and water. Bangalore, where TI has a campus, was built for 300,000 people, but it now has a population of seven million. New Delhi’s population is up to 13 million. The 1.2-billion population has just 12 ports and 25 airports.

The fast-paced growth has leaders scrambling to get infrastructure plans solidified. Yesterday’s speakers told tales like a shipment taking eight days to go 1,500 km or 930 miles after being off-loaded at a port. It’s also become commonplace for airplanes to circle for one hour before it’s their turn to land. “Those challenges are really our opportunities in India when it comes to infrastructure,” explained Pete Patel, partner in Chiang, Patel & Yerby Inc. of Dallas.

The plan is to invest $350 billion in five years and half a trillion in 10 years for infrastructure improvements. “Some will be public, but it will take foreign direct investment from people like you,” Somers said.

Chakrabarti said retail is one of the country’s leading investment areas, keeping pace with business processing outsourcing and information technology. He tells GlobeSt.com that satellites forming around the Tier 1 cities “are what are really driving the retail.” Special economic zones, introduced last year as free trade areas, are delivering their share of investment dollars and multi-national interest as well.

“India real estate prices have been off and on,” Chakrabarti said. “It’s gone up in the last decade and it’s heading north.” He said Reliance recently paid 10 times the original ask for a commercial complex in Bombay, which didn’t sell a year ago because it was considered too pricey. The difference between now and then, he said, is the amount of development. “People are very bullish about it because it’s so stable,” he said. “You name an industry and its people are investing in India.”

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