Past performance does not predict future returns. You may get back less than you originally invested. Reference to specific securities is not intended as a recommendation to purchase or sell any investment.
This article is featured in the Q3 2025 Future Strategist newsletter, you can read the rest of the newsletter here.
Historically, when comparing infrastructure in emerging markets with that of developed economies, the common image is one of a nascent development stage. These include unpaved roads winding through dust, patchy power lines and a general sense of (decades hence) catching up to the smooth highways and gleaming skylines of the developed world. The developed market template was there for all to see, and emerging markets merely needed to copy it.
When it comes to digital infrastructure, however, it can be sobering to see this image in reverse. Increasingly, emerging markets' deployment of technology and its integration into daily life is well in advance of developed markets, arguably offering a vision of our own future rather than the other way round.
In India, booking a flight increasingly feels like sending a message. A chatbot secures a ticket and checks you in using your preferences, a QR code lands in your WhatsApp, and at the airport your face is the pass. This is DigiYatra (Digital Journey): enrol once and at participating terminals you walk through e-gates with facial biometrics mapped to your ticket – no rummaging for paper or plastic. It is for domestic travel (passports and visas still apply for international legs) but the point stands: the seamless user experience, linking logistics to a centralised identity system, seems worlds away from that in the UK or US.
Source: DigiYatra (Digital Journey), Ministry of Civil Aviation Government of India.
Indeed, India's tech stack has been developed in conscious opposition to Silicon Valley. Crucially, it is built on public rails – digital infrastructure that any company can leverage. Think Aadhaar (digital ID), UPI (real-time payments), e-KYC, DigiLocker (document vault), Account Aggregators (consent-based data sharing) and now ONDC (an open network for commerce). The philosophy is simple: a standardised national digital backbone allows private companies to build on this open architecture and compete on service and user experience. The result is lower customer acquisition costs, faster onboarding, cheaper payments and relentless experimentation.
Moreover, India's huge population, high internet penetration and dramatically low data costs – not to mention a notably STEM-oriented higher-education system – provide an extremely fertile ground for technology to flourish. With 1GB of data, only $0.16 (the seventh cheapest in the world, compared to $6.00 in the US), the UPI/India Stack apps keep people online all day, with 95% of users accessing the web through mobile devices. UPI crossed the 20 billion monthly transactions mark in August, moving $300 billion between users, accounting for nearly half of all global daily digital payment transfers. DigiYatra shows a similar trajectory: the programme has logged over 16 million enrolled users and 67 million journeys since launch in late 2022. Adoption is not uniform yet but the direction of travel is clear – identity and movement are going digital end-to-end.
Internet penetration entrenched at an early stage… …thanks to the cheapest global data rates
Source: Data, 1993 to 2022. Haver, Statista forecasts, Morgan Stanley Research, February 2022; company reports.
Source: CY = Calendar Year, 2014 to 2022. Haver, Statista forecasts, Morgan Stanley Research, February 2022; company reports.
Contrast this with the US-dominated developed-world system, where access to users and data typically runs through private gatekeepers: app stores, card networks and device ecosystems. Those toll booths are lucrative precisely because they control the pipes. Even as Europe forces changes to Apples's terms, historically this model has delivered up to 30% commissions on in-app transactions. Although innovation has been strong, the benefits have largely accrued to small numbers of extremely profitable companies. The "walled garden" approach enables oligopolistic players to control the network and either prevent new entrants accessing the infrastructure or only allow them in on limited terms and at a high price.
In India's banking sector, there has been a quiet revolution driven by the Account Aggregator framework (regulated by the Reserve Bank of India (RBI)), which lets consumers move financial data between institutions via a standardised data pipe. The model is opt-in and revocable – essentially Open Banking but on a national scale.
Source: Account Aggregator
The last financial year saw nearly $20 billion of loans disbursed across over 200,000 loan accounts using such Account Aggregators (AAs), showing how underwriting is shifting from paper documents to digital cash-flow data. A key design choice was the explicit inclusion of the Goods & Services Tax Network as a Financial Information Provider – this means that small- and medium-sized enterprise (SME) sales and tax flows can (with consent) feed into bank credit models, enabling cash-flow-based lending instead of collateral-only. State Bank of India, for example, can now triangulate its own internal data with that of the government, allowing it to slice and dice it to give credit approvals in under 20 minutes compared with four days previously.
103 million cumulative successful consents
Source: Data, August 2024, India’s Account Aggregator Framework Crosses 100 million Consents in Three Years.
Emerging markets also benefit from leapfrog dynamics. There is no sunk cost in cheques, magstripe cards or desktop web. Consumers went straight to smartphones, QR codes and chat interfaces while merchants jumped from cash boxes to UPI with a printed QR and zero set up. The engineering solutions follow the local context: apps handle patchy connectivity, support dozens of languages and use WhatsApp rather than email to drive transactions and support. When the "middle era" never existed, you are not bound by the physical and imaginative restrictions that are its unintentional legacy.
This is the backdrop for a company such as Ixigo – a travel marketplace that is aggressively tech-led and data-centric, providing live feeds for trains and buses, predicting ETAs and wait lists, and stitching together multi-modal routes. In a country where transport delays can sometimes be measured in hours and days rather than minutes, Ixigo has been able to take public data and track trains in real time through cell-tower data, redirecting customers as required, providing a tangible use-case for technology, and driving clear user experience. This is a company of only 500 employees, with 85 million monthly active users, and a service layer where over 60% of voice calls and 88% of chats are resolved by autonomous AI agents.
This is what public rails enable: small teams orchestrating large networks as compressed fixed costs put a data flywheel within the reach of even mid-sized firms. AI then supercharges this process – faster support, smarter pricing, better routing and offering software-like operating leverage in sectors once thought of as operationally heavy.
India – increasingly an object of significant attraction for global tech players, hungry for the vast data lake it offers – provides a clear lesson in digital architecture: build the rails and let banks and startups compete on ingenuity at the edge. India's tech stack has already inspired a global movement, with many countries adopting or piloting similar systems – from Brazil to Singapore, France to Australia. India's experiment goes to show what happens when the state lays the track and thousands of private trains race across it.
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KEY RISKS
Past performance does not predict future returns. You may get back less than you originally invested.
We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments.
The Funds managed by the Global Equities team:
- May hold overseas investments that may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of a Fund.
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- May invest in emerging markets which carries a higher risk than investment in more developed countries. This may result in higher volatility and larger drops in the value of a fund over the short term.
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