India has all the right ingredients in place to push full steam ahead in 2024, driven largely by a strong GDP growth. Ranked fourth globally in terms of market capitalisation, the Indian stock market has been booming for the past 10 years now only trailing behind other giants like the United States, China, and Japan. India's stock market capitalisation crossed $4 trillion for the first time on 5 December 2023, with about half of that coming in the past four years1. Investing in the Indian economy presents a compelling opportunity for investors seeking to capitalise on its technological advancements, economic growth and the dynamic business environment fuelled by its growing retail investor base and strong corporate earnings
With stronger than expected growth along with continued government spending, manufacturing prompted economists to raise their growth forecast to higher than the government's estimate of 6.5% to a 6.7% - 7% rate in the fiscal year ending 21 March, 20242.
This robust growth underscores the resilience of the Indian economy despite global challenges, an upward positive trend expected to persist into the coming year. Taking note of these factors such as increased capital expenditure, the evolving composition of exports towards higher-value goods and services, and ongoing government reforms and enhancements contribute to India's compelling outlook not only for 2024 but also for the years ahead.
The expanding domestic consumer market in India has heightened its appeal to multinationals spanning various industries including manufacturing industries such as autos, electronics and chemicals to services industries such as banking, insurance, asset management, health care and information technology. This surge in interest is evidenced by the record-breaking inflow of foreign direct investment (FDI) into the country.
Again, one of the best ways to capitalise on the exciting prospects offered by India’s fast-growing economy are ETFs.
As outlined in our article related to Taiwan investment (Topic: Investment markets to keep your eyes on.), Exchange-Traded Funds (ETFs) are investment funds that track the performance of a specific index, sector, or asset class, such as stocks, bonds, commodities, or currencies. They offer a convenient way to invest in various markets and industries through a single trade. This simplicity allows investors to easily diversify their portfolios, reducing risk and maximising potential returns. Investors benefit from diversification through ETFs by spreading investments across market-leading stocks and assets, with lower fees compared to traditional mutual funds. Additionally, ETFs offer flexibility and liquidity, enabling swift adjustments to investment strategies based on real-time market trends.
India emerges as a lucrative opportunity for investors in the upcoming years. The optimal moment to seize this opportunity is now, and you can embark on this investment journey with us at DBS.
If you are new to DBS, you can open your account now and connect with an investment advisor for a more detailed walk through of investment opportunities.
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Sources:
- 1India becomes fourth-largest equity market globally, overtaking Hong Kong dated 23 January, 2024 (https://www.thehindubusinessline.com/markets/india-becomes-fourth-largest-equity-market-globally-overtaking-hong-kong/article67767716.ece)
- 2Indian economy to exceed growth estimates after strong Q2 beat: economists dated 1 December, 2023 (https://www.reuters.com/world/india/indian-economy-exceed-growth-estimates-after-strong-q2-beat-economists-2023-12-01/)
- 3Advantages of ETFs. https://www.investopedia.com/articles/exchangetradedfunds/11/advantages-disadvantages-etfs.asp
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