Is India Ready to Assume the Mantle China Left Behind?

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Is India Ready to Assume the Mantle China Left Behind?

Daniel Cross Mar 31, 2016

Making a Case for India

The long-term scenario for India looks good, too. The average birthrate is 2.5 children per woman and is estimated to contain about 20% of the world’s working population. Education standards are high as well. By 2020, India should have 12% of higher education graduates – higher than the U.S. Demographics are just one of the factors that India has going for it.

Much credit has been given to India’s Prime Minister, Narendra Modi, who’s pro-business attitude is helping shape the country’s future. Policies focusing on building up infrastructure, creating jobs, and reducing inefficient bureaucracy should help shore up India’s weak areas. Hopefully, the change will be a lasting one because India has a lot of ground to cover before it can legitimately challenge China’s previous station.

One of the challenges India faces is the lack of capital deepening compared to China, and the industrial sector requires a massive overhaul to be competitive on a global scale. It may have difficulty achieving the desired rate of economic growth until structural reforms take root and revitalize industrial activity. Still, India’s economy looks very similar to China’s several decades ago, before the explosive growth of the ‘80s and ‘90s.

Mutual Funds That Invest in India

Matthews India Fund (MINDX)

  • Year to Date: -5.9%
  • 10 Years Annualized: 9.8%
  • Fees: 1.12%
  • Top Holding: Taro Pharmaceutical Industries Ltd. (TARO)

  • Year to Date: -7.8%
  • 10 Years Annualized: 3.1%
  • Fees: 1.88%
  • Top Holding: ITC Ltd. (ITC)

  • Year to Date: -6.5%
  • 10 Years Annualized: N/A
  • Fees: 1.65%
  • Top Holding: HDFC Bank Ltd. (HDB)

The Bottom Line

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