Prem Watsa Sees China-Like Investment Boom in India Over the Next Decade

India could attract a wave of investment and manufacturing activity comparable to China’s expansion in the early 2000s, according to Prem Watsa, chairman and chief executive of Fairfax Financial Holdings. In an interview published by Moneycontrol on October 16, 2026, Watsa argued that India’s expanding trade relationships, comparatively low manufacturing costs and large domestic market could encourage companies from North America, Europe and other regions to establish production facilities in the country. He expects India’s economic growth over the next decade to create opportunities for businesses and long-term investors.

Watsa’s outlook comes as Fairfax prepares to acquire a 60.72% stake in IDBI Bank for ₹52,878 crore, following government approval. He described the transaction as the largest investment his company has ever made. Fairfax already has substantial exposure to India through financial services, insurance, infrastructure, travel and business services. Although Watsa believes India could follow a development path resembling China’s manufacturing expansion, the outcome will depend on execution, infrastructure, productivity, trade access and the ability of companies to operate competitively in international markets.

Key Takeaways

• China-like investment opportunity: Prem Watsa believes India could attract a substantial wave of investment and manufacturing activity over the next decade.
• IDBI Bank deal: Fairfax is preparing to acquire a 60.72% stake in IDBI Bank for ₹52,878 crore, subject to the transaction’s completion requirements.
• Manufacturing cost advantage: Watsa said a Fairfax-backed food-processing company’s plant near Mumbai costs substantially less to construct than an equivalent facility in North America.
• Trade agreements matter: Watsa believes India’s trade relationships could help manufacturers produce domestically and export to overseas markets.
• Fairfax’s India exposure: The group had invested approximately $7 billion in India before the proposed IDBI Bank acquisition, according to Watsa.
• Growth is not guaranteed: India’s ability to replicate China’s historical manufacturing expansion will depend on investment execution, infrastructure, skills, exports and policy conditions.

Why Prem Watsa Believes India Could Experience an Investment Boom

Watsa’s central argument is that India could become a preferred destination for companies seeking to manufacture products for both domestic consumers and international markets.

China experienced a major manufacturing and investment expansion during the 2000s, supported by industrial development, infrastructure investment and deeper integration into global supply chains. That period attracted companies seeking production capacity and access to international markets.

Watsa believes India could experience a similar investment cycle as businesses assess alternative manufacturing locations and seek access to a growing consumer market.

He pointed to India’s democratic system as an additional consideration for companies evaluating long-term investment destinations. In his view, India’s market size and potential to serve global customers could make the country increasingly attractive to international manufacturers.

The comparison, however, is an investment thesis rather than a forecast that India will necessarily reproduce China’s growth rates. The two economies differ in their industrial structures, labour markets, infrastructure, demographics and positions in global trade.

India’s opportunity will depend on whether it can convert investor interest into productive capacity, sustained exports and employment.

Manufacturing Costs Could Attract Global Companies

One of Watsa’s strongest arguments concerns the cost of establishing and operating manufacturing facilities in India.

He cited Fairfax-backed AGT Foods, a food-processing company with reported revenue of approximately $3 billion, as an example. The company is building a plant outside Mumbai.

According to Watsa, the cost of constructing the facility is around 25% to 30% of the cost of an equivalent plant in North America, while operating expenses are approximately half.

These figures are Watsa’s estimates for the project he described, rather than a verified cost comparison applicable to every industry or manufacturing facility.

Nevertheless, the example illustrates why companies may consider India when evaluating production locations. Construction costs, labour availability, land, utilities, logistics and access to suppliers can all influence the economics of a new plant.

Lower initial costs can make a project more attractive, but manufacturers must also consider productivity, transportation, customs procedures, component availability and the time required to bring facilities into operation.

For export-oriented businesses, the final calculation depends on the cost of delivering a product to customers, not simply the cost of building a factory.

How manufacturing could benefit India

If international companies expand production in India, the benefits could extend beyond the factories themselves.

• Employment: New facilities can create direct jobs and demand for supporting services.
• Supplier development: Domestic companies may gain opportunities to supply components, packaging, logistics and maintenance.
• Technology transfer: Local employees and suppliers can acquire manufacturing and operational expertise.
• Export growth: Factories serving international customers can increase India’s participation in global supply chains.
• Capital investment: New production facilities can support demand for industrial infrastructure and equipment.

The scale of these benefits will depend on how much local sourcing takes place, the skills required and whether the new facilities remain competitive over time.

Trade Agreements Could Expand India’s Export Opportunities

Watsa also highlighted India’s expanding network of trade agreements as a potential advantage for manufacturers.

His argument is that international companies may be more willing to establish production facilities in India if they can serve both the domestic market and customers in other countries.

Trade agreements can help by reducing tariffs, establishing rules for market access and improving the predictability of cross-border commerce. However, the benefits vary according to the agreement, product category, rules of origin and conditions governing access to each market.

Watsa referred to India’s trade relationships with several major economies and argued that European and other international companies could increasingly manufacture in India for export markets.

For manufacturers, the decision involves more than the number of trade agreements signed. Companies must assess whether their products qualify for preferential treatment, whether the relevant markets have sufficient demand and whether local production meets applicable standards.

Reliable shipping, efficient ports, predictable customs processes and competitive input costs are also essential.

If these conditions improve together, India could become more attractive for businesses seeking to diversify production while remaining connected to international customers.

Fairfax’s ₹52,878 Crore IDBI Bank Investment

Fairfax’s proposed acquisition of a 60.72% stake in IDBI Bank is a major part of Watsa’s broader commitment to India.

The transaction is valued at ₹52,878 crore, according to Moneycontrol’s report. The government has approved the proposed sale, but the transaction must still satisfy the applicable completion requirements and approvals.

Watsa described the acquisition as Fairfax’s largest-ever investment. It represents a substantial commitment to India’s financial services sector and reinforces the group’s existing exposure to the country.

IDBI Bank’s importance extends beyond the immediate purchase price. A controlling investment could give Fairfax a significant role in the bank’s future strategy, subject to the terms of the transaction and regulatory requirements.

Watsa has discussed the possibility of developing IDBI Bank into a globally competitive Indian financial institution. Any transformation will require decisions on capital, technology, risk management, customer service and the bank’s long-term business model.

The transaction should not be interpreted as evidence that Fairfax expects every part of the Indian economy to grow at the same pace. It is a specific investment decision involving a financial institution, supported by the investor’s broader view of India’s economic prospects.

Why the acquisition matters

The deal could have implications for several groups:

Stakeholder	Potential significance
Fairfax Financial	Expands its exposure to India’s banking sector
IDBI Bank	Could receive a new controlling shareholder and strategic direction
Indian banking sector	Adds a major foreign-backed ownership transition
Investors	Provides a prominent example of international capital committing to India
Economy	Reflects confidence in the long-term potential of Indian financial services

The eventual impact will depend on how the acquisition is completed and how the bank performs under its future ownership structure.

Fairfax Had Already Invested Around $7 Billion in India

Watsa said Fairfax’s investments in India totalled approximately $7 billion before the proposed IDBI Bank transaction.

The group’s exposure spans several industries, including financial services, insurance, infrastructure, travel and business services.

Companies associated with Fairfax’s Indian investments include Quess Corp, Thomas Cook India, Go Digit and Bengaluru International Airport Limited. Watsa said some of these businesses were expanding, creating opportunities for Fairfax to reinvest capital in the country.

This approach reflects a long-term investment philosophy focused on businesses and their management teams. Watsa has said that he places considerable importance on the people running a company rather than selecting investments solely by sector.

For long-term investors, management quality can influence capital allocation, operating discipline, risk management and the ability to respond to changing market conditions.

Fairfax’s existing investments also provide the group with exposure to different parts of India’s economy. However, the performance of these businesses will vary according to their individual industries, competitive positions and financial results.

The proposed IDBI Bank transaction would deepen that exposure while introducing additional banking-sector risks and opportunities.

Could India Become the World’s Third-Largest Economy?

Watsa expects India to become the world’s third-largest economy, overtaking Germany and Japan. The prospect reflects the country’s large population, expanding consumer market and potential for sustained economic development.

Economic rankings, however, depend on the measure being used, exchange rates and the performance of other countries. A higher nominal GDP ranking also does not automatically translate into higher living standards, productivity or income per person.

For India to sustain rapid growth, several factors will matter:

• Manufacturing expansion: Companies need to invest in productive facilities that can compete internationally.
• Infrastructure: Transport, ports, power and industrial logistics must support growing production.
• Workforce skills: Education and vocational training need to match changing business requirements.
• Trade competitiveness: Exporters must meet international standards and deliver products at competitive costs.
• Investment certainty: Businesses need predictable rules and efficient regulatory processes.
• Domestic demand: Rising incomes and consumption can support investment beyond export-oriented industries.

These conditions are interconnected. Lower factory costs may attract investment, but infrastructure bottlenecks or low productivity can reduce the long-term advantage. Likewise, a large domestic market can help businesses scale, but export opportunities can increase the potential size of the market.

What Could Prevent a China-Like Boom?

India’s growth opportunity is substantial, but a manufacturing boom is not automatic.

One challenge is the ability to create jobs and expand industrial production at sufficient scale. Manufacturing investment requires land, reliable electricity, logistics networks, trained workers and a network of suppliers. Delays or shortages in these areas can increase costs and discourage investors.

Another challenge is competition from established manufacturing economies. China has developed extensive industrial clusters, supplier networks and export infrastructure over several decades. Companies considering India must compare the complete operating environment rather than relying on labour or construction costs alone.

Trade policy also matters. Agreements may open new markets, but exporters still face product standards, competition, tariffs where applicable and shifting international demand.

Finally, foreign investment is influenced by global conditions. Interest rates, currency movements, geopolitical tensions and corporate investment budgets can change the timing and scale of new projects.

Watsa’s confidence reflects his assessment of India’s long-term potential. Whether that potential becomes a sustained investment boom will depend on measurable improvements in industrial capacity, productivity, exports and business execution.

The Bigger Picture

Prem Watsa’s outlook highlights the possibility that India could attract a new wave of manufacturing investment as global businesses reconsider where they produce goods. Lower project costs, a large domestic market and access to international customers could support that transition. Fairfax’s proposed IDBI Bank acquisition also shows that its India strategy extends beyond manufacturing into financial services and other parts of the economy.

The comparison with China’s 2000s expansion should be treated as a possible scenario, not a guaranteed outcome. India will need competitive infrastructure, productive workers, efficient logistics and stable access to export markets to convert investor confidence into sustained growth. The scale of the opportunity is significant, but its real economic impact will be determined by investment execution and the productivity of the businesses that emerge.

What Happens Next?

The immediate focus will be on the completion of Fairfax’s proposed IDBI Bank acquisition and the group’s plans for the lender after the transaction closes. Investors will also watch for new manufacturing investments, progress on AGT Foods’ plant near Mumbai and evidence that existing Fairfax-backed businesses are expanding their operations. These developments will provide concrete indicators of how the group’s India strategy is progressing.

Over the next decade, India’s ability to attract sustained investment will depend on whether businesses can operate competitively and export successfully from the country. New factories, stronger domestic supplier networks and rising productivity would support Watsa’s investment thesis. But the pace of development will depend on economic conditions, policy implementation and international demand. For now, his forecast offers an optimistic view of India’s potential, while the actual scale of the boom remains uncertain.

Frequently Asked Questions

1. Who is Prem Watsa?

Prem Watsa is the chairman and chief executive of Fairfax Financial Holdings, a Canada-based financial services and investment group with substantial investments in India.

2. Why does Prem Watsa expect an investment boom in India?

He points to India’s large domestic market, lower manufacturing costs, expanding trade relationships and potential to serve international customers from production facilities located in the country.

3. How much is Fairfax investing in IDBI Bank?

Fairfax is preparing to acquire a 60.72% stake in IDBI Bank for ₹52,878 crore, following government approval and subject to the applicable completion requirements.

4. How much had Fairfax invested in India before the IDBI Bank deal?

Watsa said Fairfax’s investments in India totalled approximately $7 billion before the proposed IDBI Bank acquisition.

5. What manufacturing cost advantage did Watsa highlight?

He said a Fairfax-backed AGT Foods plant being built outside Mumbai costs around 25% to 30% of the equivalent construction cost in North America, with operating expenses approximately half. These are his estimates for that project, not a universal industry benchmark.

6. Is India certain to repeat China’s economic boom?

No. Watsa’s comparison expresses his investment outlook. India’s future growth will depend on infrastructure, productivity, manufacturing capacity, workforce skills, trade access and global economic conditions.