India pips China as top emerging market for investments: Report

India pips China as top emerging market for investments: Report

New Delhi: India has overtaken China as the most attractive emerging market for investments, riding on multiple positive factors, including improved business and political stability, favourable demographics and friendly environment for sovereign investors, a report by a global investment management firm said on Monday. According to “Invesco Global Sovereign Asset Management Study” which factors 85 sovereign wealth funds and 57 central banks representing $21 trillion in assets, India is increasingly being viewed positively for investment among emerging markets.

The report also says that India and South Korea continue to be the most attractive destinations for increasing exposure among sovereign wealth funds.

“India exemplifies the attributes sought by sovereign investors. Viewed increasingly positively for its improved business and political stability, favourable demographics, regulatory initiatives and a friendly environment for sovereign investors, India has now overtaken China as the most attractive emerging market for investing in emerging market debt,” the report notes.

The document says India had 76 per cent citations from sovereign wealth funds (SWF) in 2023, as against China’s 51 per cent, making it the most attractive market for emerging market debt.

“India had 66 per cent citations from SWFs in 2022 against China’s 71 per cent,” says the report.

“Sovereign wealth funds favour fixed income and private debt. Emerging markets with solid demographics, political stability and proactive regulation, particularly India, have emerged as prime investment destinations,” states the study that relies on views from 142 chief investment officers, heads of asset classes and portfolio strategists from 85 sovereign wealth funds and 57 central banks.

Quoting a development sovereign based in the Middle East, the report says, “We don’t have enough exposure to India or China. However, India is a better story now in terms of business and political stability. Demographics are growing fast and they also have interesting companies, good regulation initiatives and a very friendly environment for sovereign investors.”

The Invesco report also stated that India is among a number of countries, including Mexico and Brazil, that are benefiting from increased foreign corporate investment aimed at both domestic and international demand through ‘friend-shoring’ and ‘near-shoring’.

The report says India had 76 per cent citations from sovereign wealth funds (SWF) in 2023, as against China’s 51 per cent, making it the most attractive market for emerging market debt.