Economy and politics
India is the seventh largest economy in the world. In addition, it is the fastest growing major nation. India will become the world's most populous country in 2023-2025. Population and wealth growth are driving the country forward.
India will overtake China with 1.42 billion inhabitants, but remains one of the poorest countries in the world. Numerous reforms over the past 10 years have worked, as the majority of state-owned enterprises have been gradually privatized. Nevertheless, India is still at the very beginning. The annual income is only USD 2,000.
India is considered the world's largest democracy, the population is largely Hindu, and the economy is a mix of state and private enterprise. But the state is privatizing more and more state-owned enterprises, opening up opportunities for private investors.
IT outsourcing, IT consulting, auto manufacturing, telecommunications and banking dominate the Indian economy and drive the country forward.
The Corona pandemic was a bitter blow for India, but it will not slow down growth in the long term. India is moving in a very positive direction overall: less regulation, more free market, more free trade, less religious and artificial self-restriction. However, corruption, "nepotism" and bureaucracy are still high on the agenda in India. The Hindu caste system, in which each class of the population must keep to itself, supports this system. Both could be dismantled more slowly than hoped. However, things are moving in the right direction.
The ADR Model and Investing for Foreign Investors
To invest in India, one can trade in an ADR. An American Depository Receipt is a certificate that evidences the right to a share. So you buy "the right to a share" instead of the share itself. An ADR is always denominated in USD, so certificates of India shares can only be traded in America in USD. ADRs are used to easily get foreign companies listed on a US stock exchange and are very well established. German, French or Swiss companies also use ADRs to get their shares listed on US exchanges.
The largest companies
Die größten Unternehmen sind Reliance Industries Limited und Tata Consultancy Services Ltd. But also subsidiaries of the well-known companies Unilever and Nestlé are active in India. Tata is one of the largest Indian IT service companies in the field of products and licenses.
Reliance is an industrial conglomerate and India's most valuable company. It is the number 1 oil & gas company, telecom provider and retailer in India. No other company in India has created more value in the last 25 years than Reliance Industries. With over 181 subsidiaries and 11 associate companies, its strategy is based on the three pillars mentioned above.
The largest and most important trading centers
Die National Stock Exchange NSE is India's largest securities exchange, based in Mumbai. All shares are listed in the local currency, Indian rupees (INR). It was the first fully digital stock exchange (similar to the Frankfurt Stock Exchange's XETRA trading platform) in India and was only created in 1992.
Price development of the indices
The two national stock indices are the SENSEX30 and the Nifty 50. Since 1999, the Indian stock market has had a return of 12.5% per year. The S&P500 only 9.5% per year over the same period: an excess return of 32% per year or exactly 3 percentage points per year. Currently, the Nifty 50 stands at over 17,000 points and the Sensex30 at over 57,800 points.
Trading hours in India
Exchange trading is updated every second during trading hours from 09:55 to 15:30 local time (05:25 to 11:00 CET). A review of the composition of the index takes place every three months.
