Investment Week, 10 October 2023:
It has been a year of meticulous productivity and many successes for India, the world’s fifth largest economy, and there are still more than two months to go.
2023 has so far seen the country celebrate a milestone in space exploration, bolster its position as an international manufacturing hub and strengthen global alliances – which has included issuing a 29-point joint statement on areas of cooperation from its prime minister, Narendra Modi, and US President Joe Biden.
Meanwhile, India’s domestic bourses, the Sensex and Nifty 50, defied cynics and reached record highs of 67,771 and 20,167.65, respectively, early last month.
On 22 September, US bank JP Morgan announced it would be adding India to its Government Bond Index-Emerging Markets indices from 28 June 2024, a move expected to result in billions of dollars of inflows to its government debt market.
The decision concludes years of negotiations between banks, investors and India’s government, and comes after the Reserve Bank of India introduced rupee-denominated bonds that had no restrictions on foreign ownership in 2020, paving the way for this moment.
It also provides a fresh opportunity for foreign investors looking to diversify as growth continues to slow in neighbouring China, and Russia has been removed from indices in light of its ongoing attack on Ukraine…
James Carthew, head of investment companies at QuotedData, said: “The government is looking to next year’s elections and is pushing ahead with vote-winning infrastructure investments.
“This has been accompanied by the signing of a number of trade agreements, as countries recognise India’s potential and seek some mutual benefit which will help with India’s balance of payments.”
Modi and his pro-business Bharatiya Janata Party have long been popular among investors for their fiscal reforms, including the revolutionary Goods and Services Act, which created a single market in India.
Carthew added: “Painful reforms that weighed on the stock market a couple of years ago laid the foundations for recent strong returns.
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