Andrey Terebenin got his education in the Soviet Union. After 1991 he worked for a number of the US giants which that time set up their presence in Russia. From 2015 onwards he is based mainly in India working for the venture capital fund investing into Indian start-ups.
Guillaume de Sardes: To begin with, could you explain to us what your activities consist of in general and particularly in India?
Andrey Terebenin: For 7 years I have been running the Indian team of a venture capital fund targeted at Indian start-ups in two verticals: consumer tech and some niches in tech-tech. The idea is to bring to India the experience of building up the industry giants and turning them into interesting investments.
In the global economic and diplomatic game, India adopts a balanced position. On the one hand, it is a member of QUAD (Quadrilateral Security Dialogue) alongside the United States, Australia and Japan and it welcomes significant American investments, on the other hand, it is a member of BRICS and does not apply Western sanctions against Russia, even becoming the world’s leading importer of Russian oil in 2023. You have a diplomatic background, what do you think about this policy of “multi-alignment”?
I think it’s a perfect reflection of the Indian philosophical and cultural tradition of at least two and a half thousand years of the uninterrupted existence. That tradition avoids all kinds of contrapositions (black vs. white, right vs. wrong, mine vs. alien) and insists on the unity of all beings. It may sound naïve in the current claustrophobic political atmosphere, but Indians seriously consider that traditional approach as their own contribution which they can bring to world politics. And they have reasons to believe in it: look at the unique non-violent independence movement in Indian run by Gandhi which finished with the British power on the sub-continent.
India is a demographic giant. With over 1.4 billion inhabitants, it has just overtaken China and is now the most populous country in the world. It is also the world’s third largest economy in terms of GDP (per capita at purchasing power parity). What are the most dynamic sectors and what do you think they will be in the coming decade?
Demographic dividend is a blessing. Today half of Indian population is below 25 years old and more than 65% is below 35 years old. The average age on the Indians today is 28 years and will be 35 years in 2050. Considering the extent of the Indian population, it means that each year a huge amount of young people enters the working force and use their income to consume. India has available resources to initiate the whole industries which never existed on the Indian soil – you will hear soon on the Indian break-through with semiconductors, for example. After many years of neglect India are executing huge infrastructure projects, pioneer in e-governance and fintech. Global politics apart, it’s Indian time today.
The European Union is India’s leading trading partner. Brussels and New Delhi hope to sign a free trade agreement by the end of this year. However, this timetable seems ambitious, given that the last two decades have yielded few results, with negotiations for a trade agreement having begun in 2007. Admittedly, the international context has changed. The United States is going to apply customs duties of 20% on European products, which could encourage the EU to intensify its trade with India. But does this incentive seem sufficient to you? Do you think an agreement can be reached this year? What would be the effects of such an agreement?
I’m sure that as always India will find a solution. India does not depend on the international trade and investments the way how China used to do. But in order to execute their internal plans Indians need at least begin economic environment. Some of my cynical Indian friends say that in India the red light on the road is not a ban, it’s an invitation to negotiations. I would extend this metaphor to the current tariff attacks as well.
India and China are rival powers. This rivalry has a territorial aspect (border disputes) but also a geopolitical aspect. Because of their power, India and China are competing for influence in third countries, each fearing the influence the other could have in South Asia and Southeast Asia. How do you think the political relations between the two countries will evolve?
If I would know! The epicenter of the world is drifting to Asia as used to be before the European industrial revolution and colonial wars. Time comes for the Asians to demonstrate how well they had learnt the western lessons and used that accumulated knowledge against their former masters. But the Asians are creative and have a very deep cultural tradition, they understand that in order to dominate in the future world they should offer the world THE approach which will be understandable and appreciated by everybody in that world. China and India are two very different civilizations but the global challenge in front of Asia may push them into a pragmatic union. If not, they are condemned to compete for Asian primacy, building up all possible alliances with other players.
From the 1960s to the 1980s, India and China’s GDPs were relatively equal, with China slightly ahead. In the following years, this gap widened. Today, China’s GDP is five times higher than India’s, and this gap is likely to increase in absolute terms. It currently stands at 14.2 trillion dollars, with China having a GDP of 17.8 trillion and India 3.6 trillion. Considering that the two countries have an annual growth rate of close to 6%, this gap could exceed 20 trillion within ten years. That’s huge. How do you explain such a divergence?
China is bigger that India, full stop. But China is a mentally introvert society and India is open to the world. That quality difference may kick in when time comes for an Asian alternative to change the world order.
Are there any areas in which India seems to you to be able to compete with China? And with the United States?
India has almost an unlimited pool of creative and hard-working IT engineers: rather than compete with anybody in the existing areas on costs they are turning to innovations. And here much depends on whether the bets are done smart. We will see that very soon.
