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By Pierre Lavin, Jetfin: Funds investing in India have produced exceptional performance in the last few years. Numerous managers, including Kotak, Reliance, Birla, regularly see their funds ranked among the top performers, irrespective of category.
The reasons for these results are primarily macroeconomic. The fundamentals of the Indian economy are now highly robust: average GDP growth of 8% since 1999, high levels of consumption and investment, low interest rates. India’s Prime Minister Manmohan Singh has said growth should reach 10 percent a year in two to three years time. The multifaceted development of the Indian economy is a powerful engine for job creation and increased purchasing power. India has also a talented, highly educated middle class that is nearly as large as the entire U.S. population. Plus, the country has a legal and regulatory framework that is very encouraging for investors. In addition, English language as main language for business in India is a major competitive advantage in particular compared to China.
Additionally, fund managers are exploiting major structural changes particularly in the infrastructure and consumer sectors. A recent research report published by McKinsey said India’s growing market for consumer goods could reach $400 billion by 2010 from around 250 billion in 2003. That would make it one of the world’s five biggest retail markets. India’s poor infrastructure is in fact a huge investment opportunity, give the scale on which In...................... To view our full article Click here
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