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Roudra Bhattacharya

New Delhi, Nov. 29

With the US and other western economies seeing little opportunities for investment in their own backyard for the last 12-18 months, India has emerged the most lucrative markets for short and medium-term investments.

After a gap of two years, the US is again one of the top 10 investors in the Indian stock market, according to Government data.

The country figures in the top 10 league in 2006 asthe fifth largest investor, but had scaled down its exposure as it went into a recession.

“Irrespective of job losses and primary financial institutions going under , there is still money in the kitty.

Only option

The pension and mutual funds' pool of money is still there and has to be invested for growth. For good returns, the only option available is the emerging and BRIC economies,” said Mr Vikas Vasal, Executive Director, KPMG.

According to latest data, till mid-November this year, US-based foreign institutional investors (FIIs) have net investments of about Rs 21,344.9 crore in the Indian markets, as compared with Rs 3,355.95 crore in 2006.

They top the investment list, followed by the Rs 12,275.3 crore net investments routed through Luxembourg. These two countries are followed by France, Mauritius and the UK. Total equity investments by FIIs till November 10 were Rs 70,182 crore.

“In the near future, there is no great expectation of a good return coming from financial institutions in the developed world. Even Dubai seems to have collapsed. In China and India, however, positive growth is expected for the next five-ten years,” said Mr Vasal.

He added that in Europe, US and Japan, the GDP growth rate is between -2 and 2 per cent, whereas the emerging economies are posting healthy growth of 6-8 per cent.

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