The third largest Asian economy (after Japan and China) and the twelfth largest in the world, the Indian economy is virtually a success story. A mixed economy with more of socialist features to begin with in 1947, India, today, has become home to many MNCs. Since the nineties, when India first associated herself with concepts of Liberalisation, Privatisation and Globalisation (LPG), our economy has never looked back. Having a GDP touching almost 9%, the Indian economy, in terms of growth, is perhaps one of the fastest growing. This can also be attributed to the enormous growth of the services and manufacturing industry.
Huge spurges in call centres, software industry and back-office outsourcing, combined with India’s ability to produce world-class products and goods that are available in the market for a fraction of the amount of its foreign contemporaries has favoured India and has made her a major exporter of such produces.
Due to all these factors, our booming economy, is receiving an unparalleled flow of foreign investments and robust corporate profits. Since five years, the 30-stock SENSEX has been furnishing an annual return of 40% (in Rupees), and the sectors of real estate, banking and information technology (IT) have been at the vanguard of this explosion.
But, as the saying goes, all that glitters is not gold. While the economy, as a whole, is growing, the condition of the stocks is a bit misty. However, this stands true for all the share markets of the world due to the concept of volatility. The capriciousness has increased amid rupee’s strength against the dollar and the global credit crunch hampering Indian exporters. Till date the SENSEX has lost 13%!
Nonetheless, the fund industry has meted out various options for potent US investors to invest in India. The first of the two exchange-traded funds focussing on India has been launched, with the second one in the pipeline.
The Indian Share market also has provision for Exchange Traded Funds (ETF) that holds securities and follows a specific index, and can be traded just like stocks. In addition, ETF has been designed such that its share prices are close to its underlying asset value. This entire market is now open for both PIOs – person of India origin and NRIs – non resident Indians and they can very well invest in India using properly designated NRI Accounts through various financial brokers. These financial firms offer quality NRI Services like: Demat Account, NRI Bank Account, Online Stock Trading, Indian Mutual Funds, Futures Trading and mutual fund SIPs.