Is India the place for Spectacular Investment Growth?
As India’s economy expands it is arguably becoming a strong target for investors. It is on track to expand its economy by 8% this year, and with inflation less than two thirds of the target 6%. The IMF considers it to be a standout performer.
Prime Minister Narendra Modi has implemented policies to encourage investment. For example the Modi government is planning to raise the cap on investments from five to fifteen percent in relation to the $100 billion state pension fund.
As India strives to modernise its transport infrastructure, investment in this area is up by 40%.
Of the BRIC economies (Brazil, Russia, India, China), India is the one that catches the eye.
Although investment in India is nothing new, plenty of UK investors have been using it as a high yield, high risk investment option for some time, its rapid urbanisation is seeing the country open its doors to more cautious investors.
The urbanisation has led to middle – class households rising rapidly, and the number is fully expected to hit 300 million by the end of this year. This is a startling contrast to the 50 million in 2005. It has been fuelled largely by high tech industries, consumer brands, and the financial services sector. As a result many UK fund managers have bought stakes in Indian business with an estimated £12 billion pounds invested directly in India funds.
Although in September the rupee hit a two year low against the dollar, it is somewhat protected against setbacks as its GDP is not heavily reliant on exports, unlike other countries such as South Korea and Thailand.
Consumer brands, financial services, and software are often the favourites for investors, and thanks to Modi’s election last year, the Sensex stock market is no longer cheap to buy into.
How do I Invest in India?
The key to any investment is to understand your own attitude to risk in relation to your long term goals. This can be difficult to quantify if you are unfamiliar with investment, and there are plenty of tax-traps awaiting you.
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