"Gloom, Boom, and Doom Report" editor Marc Faber says India's economy and demographics make it a much better bet for long-term growth than China.
"Given the country's size and economic potential, investors who either have no exposure to India's economy and vibrant corporate sector or are massively underweight Indian stocks should gradually become more involved in this promising country," Faber writes in his newsletter.
“I found it remarkable that at a recent Barron’s roundtable discussion in New York where a number of prominent strategists and portfolio managers had gathered, India — the world’s second-most populous country, with more than a billion people and an economy that is growing at around 8 percent per annum — wasn’t mentioned once.”
In March 2009, India added 125 million mobile phone subscribers, Faber notes.
And, though Indian auto sales are tiny compared to China’s, they are nevertheless up 39 percent year-on-year, with an annual rate of 1.6 million sales.
India’s middle class is estimated at 170 million (half the population of the United States), and the country has one of the lowest vehicle-penetration rates in the world.
“In this respect, we should also take into account that India’s population will continue to grow rapidly and will exceed China’s population before 2030,” Faber says.
For individual investors, Faber likes the Morgan Stanley Investment Fund, Infosys and ICICI Bank.
The Indian economy is expected to grow 7.2 percent in the financial year through March, the federal government said in its advance estimate, as a surge in manufacturing and a rebound in services blunt the impact of a drop in farm output, The Wall Street Journal reports.
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