Why a Haldiram story on SNG? Because at a time when economists are crying about insufficient FDI (foreign direct investment) into India, along come investment managers from across the world seeking a slice of Haldiram, the Nagpur and Delhi-based snack foods major valued at between $8.8 and 9.4 billion.
The Haldiram family, from what we read in the media, is holding out for more, as much as $10 billion and even if they settle for a little less, whoever heard of billions being sunk in Indian snacks.
At one level, it tells you that like Bollywood, samosa, dosa, chole bhature and so on are tickling palates around the world. Witness the starred opening of celebrity chef Vikas Khanna’s new restaurant Bungalow in New York recently, devoted to India’s “time honoured recipes and reimagined classics”.
If some saw that as the “Aha” moment in Indian cuisine, let’s not forget how Indian “curry” has slowly taken over staid British cuisine over the last few decades or that the Woodlands and Sarvana Bhavan chain of restaurants originating in southern India, has spread all over, from southeast Asia to the Arab Gulf states.
But we are digressing. There are hard economic lessons from the Haldiram investment saga. As mentioned previously, FDI into India appears to slowed. In an Op-ed in the Indian Express on Dec 6, economists Surjit Bhalla and Karan Bhasin say the government’s withdrawal from bilateral investment treaties is a “significant error of judgment. Foreign investors are less likely to invest without enforceability of contract, timely resolution of conflicts and predictability in judicial principles and actions.”
In other words, by pulling out of bilateral investment treaties, India has scared off foreign investors, who see only risk and no increase in returns on their investment. Slower growth also dampens investor sentiment.
China, despite all the negative reportage and slower growth, received over $90 billion in FDI vis a vis India’s $71 billion in 2023-24.
This is where Haldiram holds valuable lessons. It is an acknowledgement of some of the dynamics of the Indian market that includes factors such as urbanisation.
The World Bank has projected that by 2036, 40% of India’s population or 600 million will be living in towns and cities. Factor the rise in incomes as the economy continues to grow at between 5-to-6%, and a demographic profile where younger people predominate (currently they number 420 million or 29% of the population).
According to a survey by PRICE (People Research on India’s Consumer Economy), “these individuals hold significant power to influence India’s future,” even though 64% reside in rural India where issues of education, health, unemployment/underemployment remain major concerns.
Living in rural India does not mean they are less aspirational than their urban counterparts. Majority of the 256 medals India won at the Asian Games in 2023 were taken by young men and women from rural areas, small towns and families with incomes below Rs 5 lakh a year.
Young people, it is generally seen, are more inclined to experiment with their food. Today if Unity in Diversity is the benchmark, dosa and idli are consumed practically anywhere in the country with even Gurkha cooks making dosas in army messes in Ladakh.
“The dosa may seem more like a paratha, the sambar nothing like the original and the coconut chutney tasteless,” says an executive, handling government relations for a major EV maker, “but it’s still being eaten.”
His own background: of Bengali origin who grew up in Hyderabad lives in Delhi and travels the world. Which adds another point: as Indians travel more within India for education and work, their interaction with cultures and cuisines other than their own, can only increase.
Whichever way the Haldiram deal goes, some of the world’s biggest investment firms (Blackstone backed by Singapore’s GIC and Abu Dhabi Investment Authority, Bain Capital with Temasek) are in competition for a Taste of India. The humble Bhujiawala is getting his due!
