India’s $1bn bet on the creator economy

Good morning. Today, everyone’s attention will be on Donald Trump’s phone call with Vladimir Putin. The US president has expressed hope that he’ll be able to announce something substantial on the Ukraine war after talking to his Russian counterpart, and we’ll be keeping a close watch.

In today’s newsletter, the rising number of rich Indians has wealth management businesses licking their chops. But first, the Indian government “Likes, Follows and Favourites” content creators. 

Subscribing to the creator economy

India announced on Friday that it is setting up a $1bn fund to support the creator economy, the latest move by the government to grow and control the new media landscape. 

Information minister Ashwini Vaishnaw said the money would help content creators improve their skills and production quality, and expand to the global market. The government also earmarked Rs4bn ($46mn) to set up the Indian Institute of Creative Technologies in Mumbai. The announcements came shortly after foreign minister S Jaishankar gathered 100 foreign diplomats in Delhi to introduce them to WAVES, a global media and entertainment summit the government is holding in Mumbai in May.

India has some traditional strengths in the media and entertainment business, with Bollywood and cable television having fostered and grown a mass audience locally. The advent of video streaming has pushed the number of viewers to more than 600mn, as of last year. But extending this to a global market has been a challenge. Although Bollywood films are enjoyed in many parts of the world, they have yet to achieve the global appeal enjoyed by cultural products from other countries, such as South Korea’s Squid Game or Spain’s Money Heist. 

What the government wants to focus on is the smaller but more promising business of user-generated content, which is expected to grow to $1.1bn by 2027, according to analysts. Creators, usually young people who specialise in various niches — fashion, food, sport etc — on Instagram and YouTube, have been in the government’s sights for a while now. Some of them have a substantially large following, and were strategically used by Narendra Modi’s technologically savvy party to reach young audiences in the run-up to last year’s elections. 

Yet the government’s messaging to these young creators has been ambivalent. On the one hand, it likes the uncritical access and softball interactions that they provide, but on the other, it has done little to smooth their way. The recent troubles of Ranveer Allahbadia, aka BeerBiceps, are a case in point. Even though several ministers have appeared on his show, the government has so far not spoken up in defence of his right to free speech. 

India’s earnestness to take charge of this new growth area, and its aspiration to become a significant global player are commendable. But the government’s recent announcements seem aimed more at grabbing headlines than laying out a real strategy. The WAVES summit, originally announced for February, has now been pushed to May. And Vaishnaw’s billion-dollar fund has no details beyond its vaguely worded objectives. Who will get this money? What are the qualifying criteria? What strings are attached to it? No one knows. 

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Making money work

A record year of IPOs last year has created a whole bunch of Indian millionaires. This means big business for global and local wealth managers. HSBC plans to nearly double its branches in India with a focus on cities with significant wealth pools, while people familiar with the matter have said Swiss bank UBS is looking to acquire shares in 360 ONE, one of India’s largest wealth management companies.

Motilal Oswal Financial Services expects wealth under management in India to triple to more than $850bn in the next five years. This ties in with property consultant Knight Frank’s estimates that by 2028 there will be 20,000 Indians with more than $30mn in net worth, up 50 per cent from 2023. 

Multinational banks are positioning themselves as the right vehicles for the wealthy to grow their money by investing in India and abroad. But the wealth management arms of large Indian financial houses are not worried. Government rules allow individual Indians to invest only $250,000 a year in global markets. Gautami Gavankar, president at Kotak Mahindra Bank, told my colleagues Krishn Kaushik and Chris Kay that the lender’s wealth management clientele has grown almost 15 per cent annually for the past four years, while the number has doubled in so-called second- and third-tier cities in the past two years.

The money that these new millionaires will have at their disposal is only expected to grow as they exercise their stock options. However, recent history suggests that the preferred strategy for India’s well-heeled is to relocate outside the country, with the UAE’s golden visa promising them access to better infrastructure and quality of life, as well as proximity to home. A report by Henley & Partners last year projected that 4,300 Indian millionaires were likely to give up their residency status in India in 2024. That a larger number of Indians are becoming wealthy bodes well for the country’s economic prospects, but the next step is to get them to stay here. 

Go figure

Gold prices crossed $3,000 per troy ounce for the first time, as mounting uncertainty over trade wars has made investors anxious and pushed them towards the safe haven metal.

My mantra

“We can’t always make good choices, often circumstances force us to take the more difficult option. Choosing between travelling for work or spending time with the family is an example of this. The important thing is to take every road with joy and a bounce in your step. What keeps me going is the simplicity of the inspirational: It’s always good in the end; if it’s not good, it’s not the end.”

— Ajit Dayal, founder, Quantum Mutual Fund

Each week, we invite a top Indian business leader to tell us their mantra for work and life. Want to know what your boss is thinking? Nominate them by replying to indiabrief@ft.com 

Quick question

Tesla’s car sales and stock prices have been adversely affected by the sentiment against its founder. Do you think Elon Musk should have stuck to tending to his businesses? Take our poll here.

Tell us your reasons at indiabrief@ft.com 

Buzzer round

On Friday we asked: What is Saudi Arabia investing $40bn to create? It’s an industry it projects will employ 39,000 people by 2030.

Answer: The kingdom’s Public Investment Fund has earmarked nearly $40bn to make the country a force in gaming and build a local industry. Saudi Arabia plans to establish 250 gaming companies by 2030.

Several of you wrote in saying artificial intelligence, which is not incorrect since that has been in the headlines too. However, the answer we were looking for is the gaming industry. Onward and forward.

Thank you for reading. India Business Briefing is edited by Tee Zhuo. Please send feedback, suggestions (and gossip) to indiabrief@ft.com.