India is one of the
fastest growing countries in the world. It will be a
mistake not to take advantage of the Indian growth story
by investing in India. Investing in India will provide
diversification benefits to US Dollar or foregin currency
portfolio. US government is issuing huge sovereign debt
that is going to depreciate US Dollar in the future.
Dollar
depreciation in the future will hurt your savings
and purchasing power if your assets are denominated
in dollar. Investors are still discovering India and
there are huge growth opportunities in individual stocks
that are going to be market leaders of tomorrow. India
has well organized stock exchanges that lists over 4500
stocks. India ranks second in the world after USA in
terms of the number of publicly listed stocks. Investors
who kept faith in the Indian story during market turmoil
of 2008 were handsomely rewarded during the subsequent
recovery in 2009. Unlike other emerging market countries,
India does not depend on exports for it's growth. It's
the domestic consumer demand that is fueling growth
in India. India's advantage is that the ratio of consumer
debt to GDP is only 11 percent, well below those of
India's Asian peer, who average around 59 percent. The
underleveraged Indian consumer will shift it's wealth
tied to physical assets like Gold or real estate to
financial assets. Also, consumer-led economies are far
more stable than export led economies. Large and growing
middle class (120 million households by 2010), young
demographics (more than 50 percent of the population
is under the age of 29) are some other advantages India
has over other nations. Indian financial institutions
are strong and did not suffer any panic attacks during
financial crisis due to well managed monetary and regualtory
policies by the Reserve Bank of India, India's central
bank. All the major political parties have embraced
reform policies and inspite of opposition from the left
parties, deregulation and growth minded policies is
a one way street. In recent general elections, Indian
voters marginalized all the political parties that were
opposed to pro-growth initiatives.