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 most populous country in the world by 2023-2025. Population and wealth growth are driving the country forward.
India will surpass China with 1.42 billion inhabitants, but it remains one of the poorest countries in the world. Numerous reforms of the last 10 years have been successful, as the majority of state-owned enterprises have gradually been privatized. However, India is still at the very beginning. The annual income amounts to only 2,000 USD.
India is considered the largest democracy in the world, with a predominantly Hindu population and an economy that is a mix of state-owned and private enterprise. However, the government is increasingly privatizing state-owned enterprises, opening up opportunities for private investors.
IT Outsourcing, IT Consulting, automobile production, telecommunications, and banking dominate the Indian economy and drive the country forward.
The COVID-19 pandemic was a severe blow to India, but it will not hinder long-term growth. India is progressing in a very positive direction overall: less regulation, more free market, more free trade, less religious and artificial self-restraint. However, corruption, "nepotism," and bureaucracy still prevail in India. The Hindu caste system, in which each population group must stay within its own ranks, supports this system. Both have been dismantled slower than expected, but it is heading in the right direction.
The ADR model and investing for foreign investors
To invest in India, one can trade with an ADR. An American Depository Receipt is a certificate that represents the right to own a share. So instead of buying the actual stock, you're buying "the right to a share". ADRs are always denominated in USD, which is why you can trade certificates of Indian stocks in America only in USD. ADRs are used to easily list foreign companies on a US exchange and are highly established. German, French, and Swiss companies also use ADRs to list their stocks on US exchanges.
The largest companies
The largest companies are Reliance Industries Limited and Tata Consultancy Services Ltd. But subsidiaries of the well-known companies Unilever and Nestlé are also 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 and gas company, telecommunications provider, and retailer in India. No other company in India has created more value in the past 25 years than Reliance Industries. The strategy is based on the three pillars mentioned above, supported by over 181 subsidiaries and 11 affiliated companies.
The largest and most important trading places.
The National Stock Exchange NSE is India's largest securities exchange based in Mumbai. All stocks are listed in the local currency Indian Rupees (INR). It was the first fully digital exchange (similar to the XETRA trading venue of the Frankfurt Stock Exchange) in India and was established only in 1992.
Performance of the Indexes
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, on the other hand, only had a return of 9.5% per year during the same period: an outperformance 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
Stock trading is updated every second during trading hours from 9:55 am to 3:30 pm local time (5:25 am to 11:00 am CET). An index composition review is conducted every three months.
