Mark Atherton says
despite new limits on foreign investment, a young population
is driving economic growth
IN all the hype
surrounding China’s emergence as an economic superpower, India
can sometimes appear relegated to the sidelines. Yet India,
too, is a budding superpower in its own right. Its gross
domestic product (GDP) has expanded from £16 billion in 1980
to £500 billion today, and its economy is now the fourth
biggest in the world, in terms of purchasing power parity.
India’s rapid annual growth rate of more than 7 per cent is
reflected in the performance of funds investing in the
country. Since its launch in 2004, Fidelity’s India Focus fund
has produced a return of 246 per cent for investors. But even
this impressive showing is eclipsed by JPMorgan’s Indian
investment trust, which has returned an extraordinary 735 per
cent over five years. This month the Indian Government,
concerned about the dangers of a market “bubble”, stepped in
to limit the amount of money that foreign investors can feed
into the market, triggering a sharp correction in share
prices.
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