David Simpson became Chairman of Aberdeen New India Investment Trust on 1 April 2026. He has been a board member for five years and has a long history of business and personal interests in India.

India and I go back a long way. I have family in the country, spanning multiple generations, who have been in different ways part of India’s growth story. I have worked closely with and within Indian companies during a long career in law and merchant banking. It has helped me build an understanding of the country, with all its complexities, and a real admiration for its enterprising spirit. 

Over the decades I’ve been an observer of India and its people, I have seen significant change. It is the same intricate and multi-layered society, but the country’s natural individualism and entrepreneurial instincts have created new industries, while wide-reaching government reform has supported growth.

India has always had some of the best business people in the world. My aunt saw this first hand as she helped revitalise the Kashmiri loom industry, employing local talent to help her produce wonderful pashmina shawls. Broadening workforce participation has created more entrepreneurs, including women, educated young people and the rural population. This gives the Indian economy a unique dynamism.

Astonishing developments in digital and physical infrastructure development have helped this transformation. This has been a clear strategy by the Government and is one element of a multi-faceted reform programme. This year alone, there has been further simplification for the goods and services tax regime, which lowers the overall tax burden. We saw a reduction in income tax rates, giving people more disposable income. These two initiatives should support consumption growth, another important area for the Indian economy.

I’d also highlight the labour code reform. This has been an ambition of the Indian government for decades, but it has struggled to implement it. Finally, it has achieved a simplification of the 28-strong code to just four areas. This eases business friction and should support Indian business growth.

Elsewhere, a resolution on the tariff situation has been welcome. The broad framework of an agreement with the US is now in place. Also, the uncertainty over US tariffs has galvanised the Indian government into finalising free trade deals with other countries, including the UK and the Eurozone.

2026 presents new challenges. Some of India’s remaining structural problems have been exposed by the Iranian war. India hasn’t made the progress it needs on renewables and is still highly dependent on imported oil. This has the potential to increase the current account deficit and put economic growth and the currency under strain.

Nevertheless, it knows what it needs to do. India’s solar power capacity is expected to quadruple over the next decade, while wind energy capacity could triple, according to a report published by an adviser to the country’s power ministry. This should ultimately reduce India’s dependence on coal as a primary source of electricity. India has shown itself capable of this type of long-term change.

This is also a source of investment opportunities. On the trust, the team is invested in Power Grid and Indigrid, which are a crucial part of the connectivity for the energy transition, providing the transmission links between solar plants and the grid.

I believe the Indian economy can weather these challenges and is on the right path. Inflation in India remains well contained, and the fiscal deficit looks sustainable. At the same time, Indian businesses remain exciting places to invest.

It is true that 2025 was a tricky year from a stock market point of view, with share price performance weak over the year compared to both global stock markets and other emerging markets. That said, valuations had been high, and some kind of pause was probably necessary. Operationally, Indian companies continued to perform well.

The trust’s managers continue to swerve the more over-valued sectors, favouring areas such as financials. Communication services and healthcare are also an important part of the portfolio. The team has been more selective among Indian IT services companies where there are worries over the impact of AI. AI may be an opportunity for these companies in the longer-term, but there could be volatility in the meantime.

Ultimately, the country holds a huge amount of energy and potential. Its young people are smart, highly educated and ambitious and they will lead the country forward. I am excited to be a part of investing in India’s long-term growth.

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