India is set to be the third largest economy with the largest stock market by 2030
\nCan Aussies trade in Indian stocks directly?
\nIndian-themed ETFS on the ASX<\/p>\n
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India is on track to become the world\u2019s third largest economy by 2027, surpassing Japan and Germany, and could potentially have the third largest stock market by 2030.<\/p>\n
At the moment, the country is already the fastest-growing economy in the world, having clocked 5.5% average GDP growth over the last decade.<\/p>\n
By 2031, India\u2019s GDP could explode from today\u2019s $3.5 trillion to surpass $7.5 trillion, while its sharemarket could grow by 11% per year to reach a market cap of US$10 trillion.<\/p>\n
\u201cIndia is also gaining power in the world order, and in our opinion these idiosyncratic changes imply a once-in-a-generation shift and an opportunity for investors and companies,\u201d said Ridham Desai, Morgan Stanley\u2019s chief equity strategist for India.<\/p>\n
According to the\u00a0Morgan Stanley\u2019s report, \u00a0<\/a>there are megatrends that could drive India\u2019s growth over the next decade.<\/p>\n Manufacturing will be a big one. India is poised to become the factory to the world, with the manufacturing sector expected to increase to 21% of its GDP by 2031.<\/p>\n Indian consumers are likely to have more disposable income, with overall spending in the country expected to double to US$4.9 trillion by the end of the decade.<\/p>\n The transition to renewable energy will also become a crucial and prominent sector in India\u2019s economy.<\/p>\n \u201cThe rise in India\u2019s energy consumption alongside the energy transition opens up a new segment to boost investment growth,\u201d says Girish Achhipalia, India Utilities and Industrials analyst.<\/p>\n Morgan Stanley believes that investing in India is a long-term theme, and one that comes with its share of risks.<\/p>\n These include prolonged global recession, geopolitical developments, lack of skilled labor, energy shortages and volatility in commodity prices.<\/p>\n But sectors that played a major role in China\u2019s success over the past few decades \u2013 such as industrials, consumer goods, and financial services \u2013 are starting to gain momentum in India.<\/p>\n \u201cIn the coming decade, as India\u2019s economy transforms, we think that it will be increasingly relevant for global investors in a similar way that China is today,\u201d says Chetan Ahya, Morgan Stanley\u2019s chief Asia economist.<\/p>\n \u201cWe think that India offers the most compelling growth opportunity in Asia in the coming years.\u201d<\/p>\n \u00a0<\/p>\n Most of the trading in Indian stocks takes place on its two stock exchanges: the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).<\/p>\n The BSE has been in existence since 1875, but the NSE has emerged as the leading exchange when measured by trading volume.<\/p>\n The Indian share market is notoriously difficult for international investors to access, and are much less accessible than Chinese stocks.<\/p>\n Now read: \u00a0Chinese stocks are bouncing back, and here\u2019s how you can buy them<\/a><\/strong><\/em><\/p>\n According to Global X, everyday Australians cannot directly buy or sell NSE-listed shares, unless you have a spare $50 million lying around and can access a sub-account through an authorised institution.<\/p>\n These sub-accounts have to be registered with a pre-approved financial institution, which is an institution established and incorporated outside India solely for the propose of making investments in India.<\/p>\n In other words, it\u2019s just too difficult for the ordinary person to access the Indian market, but there are alternatives.<\/p>\n \u00a0<\/p>\n Most leading Indian stocks are dual listed on US exchanges.<\/p>\n Tata Motors (NYSE:TTM), Infosys (NYSE:INFY), Reliance Group (NASDAQ:RELI), Sify Technologies (NASDAQ:SIFY) and Wipro (NYSE:WIT) are some of household names listed in the US.<\/p>\n These stocks are mainly traded in the form of American Depository Receipts (ADR) \u2013 which are basically securities that represent foreign companies that have a secondary listing in the US, similar to what a CHESS Depositary Interest (CDI) is to the ASX.<\/p>\n In theory, investors don\u2019t get voting rights with most ADRs.<\/p>\n Investors could easily buy these securities by opening a US brokerage account with a local broker.<\/p>\n Also read: The pros and cons of owning US stocks, and how to go about buying them<\/a><\/strong><\/em><\/p>\n \u00a0<\/p>\n The only way to get exposure to Indian stocks on the ASX is through buying one of the India-themed ETFs.<\/p>\n The IIND fund aims to track the performance of an index comprising a diversified portfolio of quality Indian companies.<\/p>\n The fund selects 30 Indian companies based on a combined ranking of the following key factors \u2013 high profitability, low leverage and high earnings stability.<\/p>\n The portfolio holds 23% of its holdings in financial companies, followed by 21% in tech, and 16% in industrials.<\/p>\n As of December 9, the top 10 holdings include:<\/p>\n \u00a0<\/p>\n Source: Betashres<\/em><\/p>\n This fund offers access to 50 of the largest and most liquid publicly traded companies in India, spanning a range of economic sectors.<\/p>\n It invests 37% of the funds in the financials sector, 14.5% in tech, and 13% in the Indian energy sector.<\/p>\n Global X warns however that emerging markets like India are influenced by currency and monetary moves from around the globe.<\/p>\n This played out during the first half of the 2022, as a rising US dollar put pressure on flows and forex reserves.<\/p>\n This is the top 10 holdings of the NDIA fund as of December 9.<\/p>\n Source: Global X<\/em><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n\n \ufeff<\/span><\/span>\u00a0<\/p>\n Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.<\/em><\/p>\n The post India\u2019s stock market is set to be the world\u2019s third biggest by 2030. Here\u2019s how to buy Indian stocks<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<\/h2>\n
Is it India\u2019s decade?<\/h2>\n
How do I buy India stocks then?<\/h2>\n
Trading Indian stocks through US exchanges<\/h2>\n
Buying Indian shares on the ASX<\/h2>\n
BetaShares India Quality ETF (ASX:IIND)<\/strong><\/span><\/a><\/h2>\n
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Global X India Nifty 50 ETF (ASX:NDIA)<\/strong><\/span><\/a><\/h2>\n
ETF prices today:<\/h2>\n