How investors can participate in India's growth story

According to the World Economic Outlook by the International Monetary Fund, India is poised to be one of the fastest growing economies in the world during the next five years with the average rate of GDP growth forecast to exceed 8% until 2015.

India's GDP growth has averaged more than 7% between 2001 and 2010, having grown three-fold from US $470 billion to US $1.5 trillion, and 2.8 times on a per capita GDP basis.

India's economic fundamentals are supported by its unique demographic profile. India is the second most populous country in the world with approximately 1.2 billion people. Almost half of India's population is below the age of 25 and India is expected to contribute 26% of the increase in the global pool of the working age population in the next decade. The rate of urbanization is also intensifying. According to a 2010 study by McKinsey Global Institute, by the year 2030, approximately 40% of the Indian population, or 590 million people, are expected to live in cities. These demographics mean that an increasing number of people are moving into "middle class" which in turn is leading to higher levels of consumerism.

Similar to many other studies, Mercer does not believe that a higher economic growth rate necessarily leads to higher equity market returns. However, India appears to also have the strong growth in corporate earnings that usually accompanies good performance from listed shares.

We believe all current and potential investors would benefit from an understanding of the available investment opportunities. In this paper, we have grouped these opportunities under the following asset classes:

• listed equities
• unlisted infrastructure
• real estate
• private equity
• debt

Services we provide

• Research of alternative asset classes such as infrastructure, private equity and real estate

• Research and monitoring of liquid, equity and debt mutual funds

• Targeted market research to help your organisation and board to understand the Indian investment environment or specific opportunities

• Monitoring services for your direct or indirect exposures to India for alternative asset classes

• Operational risk assessments of investment managers