5 Main Reasons Why You Should Invest in India

Way back in 2001 Goldman Sachs’ Global Investment Research Division publishes a report in which it coined the acronym BRIC – four countries that would reshape the world economy– Brazil, Russia, India and China. The acronym was later changed to BRICS with South Africa being added to the list and now Iran, Saudi Arabia, United Arab Emirates and a few countries from South America like Argentina & Bolivia and African countries like Egypt, Ethiopia, Democratic Republic of Congo etc. have expressed interest in joining the forum, according to 2023 summit.

Today, more than 20 years after this report was published the Indian economy continues to grow stronger. Russia is plagued by war, China by surging unemployment and a plunging real estate sector, while falling commodity prices and political turmoil continue to haunt Brazil. Thus, out of the original BRIC – only the “I” seems to be growing strong and is now a $4 Trillion economy – with the long-term trajectory tending to look upwards.

There are 5 main reasons that make India an investment destination of choice, namely:

  1. Demographic Dividend:
    Being the most populous country in the world and with more than 65% of the population below the age of 35, and most of them English speaking, India possesses a vast and dynamic workforce. This demographic dividend contributes to a growing consumer market, increased productivity, and a potential labor force for various industries. The expanding middle class in India aids a rising consumer base with increasing purchasing power. This trend creates opportunities for companies in sectors like retail, consumer goods, and services to tap into a growing market of discerning consumers.

  2. Government Initiatives:
    The Indian government has been implementing various initiatives to improve the ease of doing business, attract foreign investment, and stimulate economic growth. Reforms such as the Goods and Services Tax (GST) and Make in India campaign aim to create a more investor-friendly environment.

  3. Technological Innovation:
    India has become a global hub for technology and innovation. With a flourishing startup ecosystem and a focus on digital transformation, investing in Indian technology companies and startups presents opportunities for significant returns in a rapidly evolving market. Even global giants like Apple have started manufacturing in India for the local market.

  4. Infrastructure Development:
    India is investing heavily in infrastructure projects, including transportation, energy, space exploration and urban development, to name a few. These initiatives not only boost economic activities but also create opportunities for investors in sectors such as construction, logistics, and renewable energy.

  5. Diverse Investment Sectors:
    India offers a diverse range of investment sectors, including information technology, healthcare, renewable energy, FMCG, financial services and much more. Where this helps is that there aren’t just one or two sectors that are the engines of growth but multiple sectors demonstrating growth over the last decade.

Participate in the India Growth Story

There will be many companies that drive this consumption and growth story for India. E.g. as a large and aspirational population increases consumption, there will be an increasing demand for lifestyle goods, cars etc. thereby helping companies that make white & brown goods and automobiles. The government will have to improve infrastructure which gives a fillip to sectors like cement, steel etc. Startup India also helps young and aspiring entrepreneurs to set up their own companies. There are myriad such examples to show that the India growth story is on the fast track.

What better way to participate in this growth story than by being an owner of these companies? Investing in equites allows you to be a shareholder in some of the largest companies in India. With the untapped potential that is the Indian market, some of these companies make for prudent long-term investments, that could help your money grow in the long run.

These are just some of the reasons that make investing in India for the long term a smart choice. Get in touch with a good Investment Advisor who can guide you on how you can be a part of this long-term growth story by investing in the right avenue at the right time.

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