India: An Investor's Dream…Just Not Quite Yet

In the last six years I have been to India three times. I’ve spent a total of nine weeks there.

As a result I’ve seen the world’s worst slums and best hotels. I’ve seen a middle class dream just as strong and tacky as the U.S. I’ve seen one of the few countries in the world, developed or not, that can make good movies (much better than the Chinese). I’ve seen the first $1 billion skyscraper in Mumbai that was a personal residence. I’ve met a number of highly successful mega-entrepreneurs.

And all of it leads me to one conclusion: India, without a doubt, is the emerging country to watch.

Not just China as most pundits would have you believe…

Besides being in an insanely large bubble, China has the largest population and the second largest economy in the world. But it doesn’t nearly have the growth potential that India has (India will clearly end up being the largest population in the world.)

The key lies in the greatest factor that drives growth in any country…

That is urbanization.

Back in the late 1700s, the Industrial Revolution in Great Britain set off a wave of energy-driven goods-production and urbanization. Better and more specialized jobs rose up as a result, causing one major country after the next to grow and reach unprecedented levels of prosperity and GDP per capita.

This urbanization revolution spread to Westernrn Europe and then more and more countries around the world. It then hit emerging countries in East Asia, starting with Japan… then South Korea. Now it’s accelerating in China, and on a lag, India.

Today, developed countries are already 80% plus urbanized. Emerging countries are scrambling to catch up…


Malaysia is one of the richest emerging countries in Asia because it has hit the 70% urbanization mark already. China has just passed 50% urbanization. As a result, it is much less affluent than Malaysia and much less so than the U.S.

(By the way, our projections indicate that even with the urbanization still to come in China, the country will never be as rich as the U.S., at least not in your lifetime)

But when it comes to India… it is only 30% urbanized right now, giving it the greatest potential for growth as its population explodes to ultimately dwarf that of China AND all those people rush to the cities.

In fact, we forecast that India will eventually be the third largest economy in the world.

That doesn’t mean now’s a good time to bet on India…

Yes, India’s workforce growth and potential Spending Wave grows dramatically into the 2050s and 2060s, as the chart shows.

But the country is facing some headwinds in bureaucracy and inflation trends. It is also struggling with insufficient infrastructure with which to leverage its massive and creative population. When the next crash hits, it’ll drag India (and the whole world) down with it.

So wait until the next downturnrn bottoms around early late 2014/2015, then start loading up on stock funds and ETFs in India.

The country’s stock market definitely shows it has much more potential than China… Its demographic trends and urbanization potential are the highest among any large population country. And its population is driven and innovative.

Don’t believe me? Just look at what they’re doing in the motor industry with the $2,700 Tata… or the medical industry with the $1,900 heart surgery… or the bicycle-powered washing machine…

India is the emerging market of the future. It will clearly be one of the top three nations in the world, behind the U.S. and China, in the decades ahead.

Invest in India after every major stock crash ahead.




Ahead of the Curve with Adam O’Dell

Groundwork for a Boom in India

And, it just so happens, Boom & Bust subscribers already own shares of this urbanization-driven cash cow. It’s a good thing too.



Harry Dent

Bestselling author and founder of Dent Research, an affiliate of Charles Street Research. Dent developed a radical new approach to forecasting the economy; one that revolved around demographics and innovation cycles.