Equity
Emerging Market Equity

India Equity vs China Equity

Published on
March 31, 2023
Contributors
RFPnetworks favicon
RFPnetworks editorial
Engagement & analytics
Subscribe

Trends newsletter

Get our insights on what asset manager selectors are reading. Delivered weekly.
Request successful. You will receive confirmation shortly.
Oops! Something went wrong while submitting. Try again.

2022 brought a continuous chain of bad news for investors in Chinese equities. The question on professional investors minds today is whether moving money from China and into India makes sense.

In many respects, the long term investment theses for India shares many top level commonalities with China, albeit with differences in the details:

3 Differences Between India and China

The demographic story - India has a younger population that will drive urbanisation as they head for cities, educated and fully focused on wealth creation.

The corporate story - India boasts corporations and a new IPO pipeline focused on delivering on the new digitisation and e-commerce megatrends supported by software development services.

The geopolitical story - as long as tensions between the U.S. and China remain, diversifying supply chains away from China and into India makes good business sense.

India or China?

The answer may lie in current valuations. Much of the good news in India may already be priced in. But with a diverse array of opportunities across multiple sectors to choose from, company fundamentals, governance and leadership may be able to unlock the significant opportunity presenting itself to India.

Investment Manager research inside RFPnetworks points to India becoming the China +1 for investors. From a macro perspective, India may match or exceed China's GDP growth target. Indian banks have delevered and exhibit strong balance sheets. This is driving local investment in parallel to new hard needed infrastructure initiatives. Middle-class Indian consumers are also in a strong financial position and directing their unspent wealth on property, travel and leisure.

The risks to the India investment case are primarily political and macroeconomic. The next general election is in May 2024, but Prime Minister Modi is still widely popular. Inflation is an issue, so overly aggressive monetary policy could impact the growth story.

On balance, the choice between India or China is not easy. But neither is it a mutually exclusive decision.

Related Investment Trends

Emerging Market Equity

Follow the asset managers and topics that are trending with manager selectors.
India Equity Research on RFPnetworks depcited by young professional IT worker.

10 Reasons For Indian Equities in 2023

Delve into the top 10 reasons why smart investors are increasingly considering Indian equities for potential growth and returns.
Read post
India Equity Research on RFPnetworks depcited by young professional IT worker.

10 Reasons For Indian Equities in 2023

Delve into the top 10 reasons why smart investors are increasingly considering Indian equities for potential growth and returns.
Read paper
RFPnetworks MENA investment case depicted by NEOM in Saudi Arabia

Is MENA Investing The New BRICS

Whilst traditional emerging market equity investors remain focused Asia and South America, the more experienced manager selectors are watching MENA.
Read post
RFPnetworks MENA investment case depicted by NEOM in Saudi Arabia

Is MENA Investing The New BRICS

Whilst traditional emerging market equity investors remain focused Asia and South America, the more experienced manager selectors are watching MENA.
Read paper
Emerging Market Equity research on RFPnetworks depicted by the eyes of an Indian Brride.

India Equity vs China Equity

The case for Indian Equities has only got stronger. But is it strong than the case for China?
Read post
Emerging Market Equity research on RFPnetworks depicted by the eyes of an Indian Brride.

India Equity vs China Equity

The case for Indian Equities has only got stronger. But is it strong than the case for China?
Read paper
RFPnetworks India Stock Market Research depicted by Indian dance.

Will India Continue to Outperform?

Many Investment Managers expect India to post the largest real GDP growth globally in 2023. But the Indian market is expensive despite strong fundamentals.
Read post
RFPnetworks India Stock Market Research depicted by Indian dance.

Will India Continue to Outperform?

Many Investment Managers expect India to post the largest real GDP growth globally in 2023. But the Indian market is expensive despite strong fundamentals.
Read paper
Mondrian on RFPnetworks Emerging Market Equity Research Feed depicted by Taj Mahal

India – The Valuation Conundrum

In what is turning out to be a challenging year for global stock market returns, the performance of India stands out within the emerging market...
Read post
Mondrian on RFPnetworks Emerging Market Equity Research Feed depicted by Taj Mahal
Mondrian Investment Partners

India – The Valuation Conundrum

In what is turning out to be a challenging year for global stock market returns, the performance of India stands out within the emerging market...
Read paper
Emerging Market equity research on RFPnetworks depicted by older asian woman carrying goods through field on their backs.

Emerging vs. Developed Market Equities

Emerging Markets have performed relatively strongly versus Developed markets during the crisis. This surprised most risk-off investors for several reasons.
Read post
Emerging Market equity research on RFPnetworks depicted by older asian woman carrying goods through field on their backs.

Emerging vs. Developed Market Equities

Emerging Markets have performed relatively strongly versus Developed markets during the crisis. This surprised most risk-off investors for several reasons.
Read paper
Emerging Market Equity research on RFPnetworks depicted by sepia bokeh effect

Emerging Market Equity Countries

Emerging Market Equities are experiencing significant performance dispersion across countries. Their exposure to inflation is not uniform.
Read post
Emerging Market Equity research on RFPnetworks depicted by sepia bokeh effect

Emerging Market Equity Countries

Emerging Market Equities are experiencing significant performance dispersion across countries. Their exposure to inflation is not uniform.
Read paper
India Equity research on RFPnetworks depicted by ancient wooden engraved wheel

EXPLAINER: Recent Sell-Off In Indian Equities

Is the sell-off in Indian Equities just about crude oil and commodity prices. Or has the long-term investment thesis for Indian Equities changed.
Read post
India Equity research on RFPnetworks depicted by ancient wooden engraved wheel

EXPLAINER: Recent Sell-Off In Indian Equities

Is the sell-off in Indian Equities just about crude oil and commodity prices. Or has the long-term investment thesis for Indian Equities changed.
Read paper

Are you an asset manager selector?

Access 40k+ professional investment research white papers