Investing in India: Why You Should Consider Foreign Investing and How To Get Started
India is one of the world’s most rapidly growing economies, and a lot of companies in the country have become promising investments to many looking to diversify their portfolio.
In this article, you’ll learn more about investing in India, including why so many investors from outside the country have decided to invest in India. For example, check out this page about impact investing in India.
We will also talk about how you can start investing in companies from India and other countries from the United States. Additionally, we will go over some companies in India that have performed well in the market.
Why you should consider investing in India
India’s average GDP growth rate is 7.5%, which is around three times larger than the United States’ average growth rate at 2.5%. With a rising middle class and the sixth-largest economy in the world, it is projected that India’s economy will continue to grow over the coming years.
In addition to a rapidly growing economy, India has a stable democracy at its core. The government favors foreign investments, and has even implemented several policies that help ease the process for foreign investors to encourage more investments coming into the country.
Many investors are choosing to invest in India because of the significant growth potential of the economy. With a young and growing population, the sky’s the limit when it comes to business in India. The country’s GDP is $3 trillion (in USD) and they have a population of 1.3 billion. Plus, it’s projected to surpass China this year to become the most populated country.
The Nifty 50, or the National Stock Exchange Fifty, is a stock market index of the 50 largest publicly listed companies in India. In recent years, companies in this index have had an average return of 14% a year, compared to the average return of around 12% of the S&P 500.
Getting started
Investing in companies off of the Nifty 50 or other indexes is relatively straightforward, and there are a few different ways you can do this if you’re investing from outside of India.
The most common way of investing in foreign stocks is by going through a brokerage that offers international trading services. If you want to check if your broker will let you directly invest in Indian stocks, then look for the National Stock Exchange of India (NSE) or Bombay Stock Exchange (BSE) when researching that information.
Alternatively, investors who cannot access a brokerage with international trading services can simply invest in mutual funds that hold shares of Indian companies, or in ETFs that track various aspects of the Indian stock market.
Indian stocks to consider
- Tata Consultancy Services (TCS). Tata Consultancy Services is one of the best performing stocks on the Indian stock market. With an average growth rate of 22% a year over the past decade, this stock is a popular investment for many looking to begin investing in India.
- HDFC Bank. With an average growth rate of 20% over the past decade, HDFC Bank is another top stock for investors in India. The bank is one of the largest banks in India, and the company has a market cap of $106 billion.
- Reliance Industries. The largest company in India is a very attractive investment for many looking for a stable investment. With an average growth rate of 17% over the past decade, Reliance Industries is a great pick for Indian and foreign investors alike.
After reading this article, you should have a better understanding of why and how to invest in this rapidly growing country.
