In 2024, the Indian market surged mainly due to a 6.8% GDP growth, attracting $60 billion in foreign investment, with the Sensex index growing by an average of 14% annually, driving the market upward.
Why is the Indian market so high?
During the US-China trade war, the Indian stock Sensex index rose by more than 40% since 2018. Many multinational companies shifted their production lines from China to India; for example, Apple set up a production base in Bangalore, creating thousands of jobs.
During the trade war, the Indian government reduced corporate tax rates to 25%. Indian Finance Minister Nirmala Sitharaman stated in an interview, “The resilience and attractiveness of the economy.” The Nifty 50 index rose by 20% within six months.
India’s foreign capital inflow reached a record $50 billion in 2019, a 16% increase year-on-year. A report by the Federation of Indian Chambers of Commerce & Industry (FICCI) noted, “The influx of foreign capital provided financial support.”
In 2018, the stock prices of Indian IT companies such as Infosys and TCS rose by 30% and 25%, respectively.
According to a Morgan Stanley report, “Investors look for markets like India.” This was especially evident during the COVID-19 pandemic in 2020, when the Sensex index rose by 35% in six months.
Famous investor Ray Dalio once said, “Finding opportunities in crises often leads to excess returns.”
India-ASEAN Relations
Since India implemented the “Act East Policy,” trade volume has grown by more than 10% annually. In 2019, India’s exports to ASEAN reached $75 billion, a 12% increase year-on-year. Exports mainly focused on electronic products, auto parts, and pharmaceuticals. For example, Tata Motors in India drove up its stock price.
The total investment of ASEAN countries in India has increased by 50% over the past five years. Singapore invested in highway and port construction in India. For example, the stock price of Indian infrastructure development company L&T rose by 35% in three years.
India has also cooperated with ASEAN, such as Infosys collaborating with ASEAN countries, helping Infosys gain more orders and significantly boosting its stock market value.
According to data from the Ministry of Commerce of India, after the implementation of AIFTA, India’s exports to ASEAN doubled to $100 billion in five years. For example, India’s Sun Pharma saw a 40% increase in sales in the Southeast Asian market through AIFTA, driving up its stock price.
Famous economist Raghuram Rajan once said, “Regional economic cooperation is an important way to promote economic growth.”
Stock Market Boom
Since 2014, the annual growth rate of the Sensex index has reached 12%, breaking the 40,000-point mark in 2019. For example, the stock of India’s largest private bank, HDFC Bank, has risen by 50% in the past five years, with a current stock price of ₹1,540.
In 2018, a total of 24 Indian companies went public, raising a total of $20 billion, a 30% increase year-on-year. For example, Indian e-commerce giant Flipkart raised $6 billion in its 2018 IPO.
The Indian government’s introduction of the Goods and Services Tax (GST) and structural reforms in the banking sector have reduced the average corporate tax burden by 5%, according to a Morgan Stanley report.
According to data from the International Monetary Fund (IMF), India’s GDP growth rate reached 7.3% in 2018. For example, Indian automaker Maruti Suzuki’s sales grew by 20% in 2018, with its stock price rising by 25% during the same period, currently priced at ₹9,230.
Renowned investor Warren Buffett once said, “Invest in markets with long-term growth potential.” India’s middle-class population has grown by 50% in the past decade and is expected to reach 500 million by 2030.
Indian tech companies such as Infosys, TCS, and Wipro not only hold significant positions in the domestic market but also derive 70% of TCS’s total revenue from international business in 2019, with its stock price rising by 18% in one year, currently at ₹3,270.
ICICI Bank’s stock price has grown by 30% in the past five years, currently priced at ₹690. The stock price of consumer goods giant Hindustan Unilever (HUL) has also risen by 40% in five years, currently priced at ₹2,400.
