India surpasses China as most attractive emerging market for investing

Due to its stable demographics, political stability and proactive regulation, India has surpassed China as the most attractive emerging market for sovereign wealth funds to invest in by 2023, according to a report released ON Monday.

Invesco Global Sovereign Asset Management report includes views of 142 chief investment officers, heads of asset classes along with senior portfolio strategists from 85 sovereign wealth funds and 57 central banks. These organisations collectively handle over USD 21 trillion in assets.

According to the report, India is now a better story in terms of economic and political stability. Furthermore, the country benefits from rapidly rising demographics, good regulation initiatives, and a very welcoming climate for sovereign investors.

"India has now overtaken China as the most attractive emerging market for investing in emerging market debt," the report says.

According to the report, India is one of several countries benefiting from rising foreign corporate investment aimed at both domestic and worldwide demand, including Mexico and Brazil. This was viewed as helping in the funding of current account deficits as well as the backing of currencies and domestic assets, including debt.

Furthermore, India and South Korea remain the most attractive destinations for boosting exposure, according to the report. Emerging markets provide a variety of appealing investment options in both the public and private markets.

The report further found inflation as the most significant short-term risk to global economic growth, followed by rising geopolitical risk, tight monetary policy, supply chain disruptions and the impact of climate chain on the environment as other risks. 

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