The population of India, at 1.43 billion, has surpassed that of China for the first time in history this year, requiring financial managers to navigate a monumental transition.
India, the world's most populous nation, could experience a multi-decade investment surge. Analysts at Goldman Sachs Group Inc. anticipate that its share of the global equity market capitalization will quadruple by 2075, reaching 12%, when it will be tied with China's. (During the same time period, the US share is expected to fall by half, to 22%.)
India and China both offer investors the opportunity to profit from the economic development of rising powers. China is the second-largest economy in the globe, with a massive consumer market and sophisticated manufacturing. India has improved relations with the West and a youthful population. It is anticipated that its economy will grow 6% to 7% annually, outpacing China's. Its burgeoning middle class will spend well beyond basic necessities.
Conrad Saldanha, a portfolio manager at Neuberger Berman specialising in emerging-markets equity, believes India will benefit as companies seek alternatives to China's manufacturing industry. "India is likely one of the best examples of structural growth in the world," he says. Sukumar Rajah, director of portfolio management at Franklin Templeton, believes that India's increased consumer spending, including on luxury goods, will create new investment opportunities.
However, Hugues Rialan, the chief investment officer for Asia at Pictet Wealth Management, believes that Indian equities are overpriced. The benchmarks for the nation's equities have increased every year from 2016 to 2022. "Over the next 12 to 24 months, we prefer China given that we expect the economy to reaccelerate and its equity valuations are low today," he explains.
Investors are increasingly comparing the two enormous Asian markets when deciding where to place their investments, despite the fact that this is not necessarily a binary choice.
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