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Should you invest in India?

21/12/2022

New year, new ways to invest? If you’re looking for somewhere different to invest your money in 2023, we ask the question: should you invest in India? 

 

The history of the BRIC countries

The term BRIC – referring to Brazil, Russia, India and China – was coined around 20 years ago to denote the four major countries that could become major economies in the future. Since then, the acronym has changed to BRICS to include South Africa. 

Since the term was coined, performance of BRIC-based investments has not been as strong as many investors would have hoped. However, could all that be set to change?

 

The world’s fifth largest economy

Despite its performance over the last 20 years, experts believe that the future looks bright for India. 

In October, the International Monetary Fund described India as “a bright spot on the dark horizon” because of its fast growth during challenging times. This description came on the back of the announcement that the size of the Indian economy overtook that of the UK this year, making it the seventh largest in the world. 

What’s more, new book The World in 2050: How to Think About the Future, published in May 2022, predicted that this would happen – and also predicts that India will be the third largest world economy by 2050. 

 

Structural reforms

Since Narendra Modi became India’s Prime Minister in 2014, he has introduced a range of structural reforms. These include new regulatory architectures, an Insolvency and Bankruptcy Code introduced in 2016, and the Production-Linked Incentive Scheme, designed to improve production and capability in the manufacturing industry. 

Furthermore, changes to India’s foreign direct investment policy led to it reaching its peak FDI inflow to date – $81.97bn – in 2020/21. 

 

How to invest in India

While regulatory changes have made it possible for foreign investors to buy shares in India, there are certain steps you need to take first – like opening a Demat account for trading. Instead, some investors choose to invest in funds that are weighted towards India, with many emerging market funds focusing on the country. 

With its government’s commitment to growth and regulation, could India surpass China as an attractive place for investors to invest their money?

 

“Stable Rise Limited is not authorised or registered by the Financial Conduct Authority. The marketing materials are not intended to provide financial advice nor promote any individual financial products.”

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