Although India is often mentioned in the same breath as China, the enormous growth that China has enjoyed has been a little slow to materialize south of the Himalayas.
The fact is, China has been spending enormous cash to modernize its regional infrastructure as hundreds of millions of previously agrarian people make the transition into a world of day jobs, cell phones, and condo life.
India has also come a long way, but as yet the big infrastructure push has not happened.
However, the big push may be on the horizon. The current government expects to double its budget for new roads, ports and power plants — an especially key feature for the country’s straining electrical grid — over the next seven years.
By 2017, the infrastructure campaign will pump $1 trillion back into the Indian economy and theoretically push GDP expansion to 9.5% a year.
If so, India will be growing faster than China is growing today. Given China’s head start, we should probably not expect Delhi to pass Beijing as the world’s No. 2 economy any time soon… but Japan’s days as No. 3 could be over as early as next year.
With two of the BRIC countries ahead of Japan, and with Europe slowing as well, the era of G-3 ascendancy seems to be ending fast.
So how do you play a China-style boom on the Indian side?
Although the selection of individual ADRs from India is a little limited, there are plenty of broad India ETFs to choose from. The one that best represents what is going on in Mumbai is probably PIN (quote)