• Population of over 1.3 billion people is among the youngest in the world.
  • Domestic consumer demand is being driven by India’s growing middle class, increasing urbanization and rapid household formation.
  • Under-penetration of consumer products and services, health care and banking provides growth potential that’s attractive to investors like Wasatch.
  • India is a democratic republic that embraces capitalism and the rule of law, and the country has a strong regulatory framework led by the Reserve Bank of India.
  • Prime Minister Narendra Modi’s new initiatives, bureaucratic reforms, tax simplification, improved labor laws and streamlining of the bankruptcy process are designed to further the country’s growth and development.
  • Low sector correlations provide diversification and potentially lower the risk of investing in India compared to Brazil, China and emerging markets overall.
  • Compared to other emerging-market companies, Indian companies often exhibit more of the quality metrics we favor.
  • Productivity growth is rising in India, while it has been slowing in most major economies.
  • Wasatch has well over a decade of experience investing in India.


Wasatch Advisors has been investing in India for well over a decade. We hope this paper will illuminate why we remain excited about the investment opportunities there. For starters, the universe of high-quality Indian companies is broader and deeper than what we’ve found in many other emerging markets. In China, for example, very few companies measure up to our strict criteria, and government meddling often clouds the whole investment picture. By contrast, our on-the-ground research in India continues to provide us with a wealth of strong, well-managed companies with significant growth potential.

A democratic government underpins India’s investment environment. The strong institutions it has built have helped the country avoid much of the political turmoil, massive borrowing, debt defaults and runaway inflation that have plagued some other emerging-market countries during the last 30 years. We also like India’s growing middle class, young demographics (as indicated in the chart below) and high personal savings rates.

Sources: Global Demographics, Macquarie Research, September 2015.

Moreover, we’ve found that market forces (rather than political patronage) are increasingly having positive effects on India’s national and state policies and on infrastructure development. In India—relative to most other emerging countries—our research has shown that management expertise, financial controls, corporate governance and transparency are remarkably good.

The reasons for these positive conditions include a strong regulatory framework led by the Reserve Bank of India (RBI) and a long history of multinational corporations. In fact, many multinationals have had operations in India for more than 75 years, which has created a robust business culture despite periodic political and economic challenges.