Indian Summer
Forbes on Investing in India.
"Of all the emerging-markets countries," says Christopher Taylor, emerging-markets portfolio manager at New York's Hudson Fairfax Capital, "India is the one with the solid foundations."
The country doesn't want for growth: GDP increased 8.2% last year, and 7% is expected this year. If anything slows the pace over the long term, it won't be demographics. India's population is among the youngest in the world, with 60% of its people under age 32. An emerging middle class of 300 million provides "a phenomenal growth prospect," says Siddharth Mehta, fund manager in London for San Francisco-headquartered Gerken Capital, which recently launched a long-short India fund called WM India
Mehta says that five years ago Indians saved 30% of their income; today the savings rate is 18% as they splurge on automobiles, home loans and cell phones. In 1999 India had 2 million cell phone subscribers. Today that many sign up every month, Mehta says, noting that still only 2 out of every 100 Indians have a cell phone.
Mehta also reckons that 20 million Indians a year graduate from university, many with math or computer degrees. Hudson Fairfax Capital's Taylor says the high-end workforce is a reason that many of India's exports--computer software and pharmaceuticals--look snazzier than China's.
Yet the country has hurdles ahead. Red tape, especially at the state level, is beyond comprehension. India struggles to generate enough power to keep up with its rapid growth. The place is saddled with bumpy roads, patchy telecommunications networks and a nuclear rival in Pakistan.
"Of all the emerging-markets countries," says Christopher Taylor, emerging-markets portfolio manager at New York's Hudson Fairfax Capital, "India is the one with the solid foundations."
The country doesn't want for growth: GDP increased 8.2% last year, and 7% is expected this year. If anything slows the pace over the long term, it won't be demographics. India's population is among the youngest in the world, with 60% of its people under age 32. An emerging middle class of 300 million provides "a phenomenal growth prospect," says Siddharth Mehta, fund manager in London for San Francisco-headquartered Gerken Capital, which recently launched a long-short India fund called WM India
Mehta says that five years ago Indians saved 30% of their income; today the savings rate is 18% as they splurge on automobiles, home loans and cell phones. In 1999 India had 2 million cell phone subscribers. Today that many sign up every month, Mehta says, noting that still only 2 out of every 100 Indians have a cell phone.
Mehta also reckons that 20 million Indians a year graduate from university, many with math or computer degrees. Hudson Fairfax Capital's Taylor says the high-end workforce is a reason that many of India's exports--computer software and pharmaceuticals--look snazzier than China's.
Yet the country has hurdles ahead. Red tape, especially at the state level, is beyond comprehension. India struggles to generate enough power to keep up with its rapid growth. The place is saddled with bumpy roads, patchy telecommunications networks and a nuclear rival in Pakistan.
