One point to note in Emerging Markets like India is that the Indices are quite often not the best way to assess them. Whilst India may appear expensive at the Index level, there are several attractive companies trading with cheaper valuations, beneath the large and mega caps (e.g. top 10). Significant inflow into India from foreign investors and increased investment from local investors through mutual funds (over the last 2 years) have pushed the largest and most liquid companies into significant premium valuations, providing a falseness about overall market valuations. Definitely a time to avoid market-cap weighted Indices in India! However, some companies like engineering, cement, manufacturing are priced at 8-12x and will be significant beneficiaries in the turn of the business cycle, given excess capacity at present.

On India: A good macro story but fully priced -

Hi Sathyan, Dabur manufactures and distributes its products directly and indirectly (via Kirana or corner stores as it is known here). As 45% of revenue is rural, (with presence in over 40,000 villages) they are able to have such wide distribution reach through 6.3 million retail outlets across India.

On Grassroots Tour of India - Day 1 -

Hi Richard, There are a few options for India. Typically EM, Asia and Global Equity Funds offer between 0-30% allocation. However, for a 100% investment in India you have the choice of four actively managed funds in Australia. India is a country where active management can make a significant difference to returns achieved, given the level of inefficiency which exists typically in any emerging market. Hope this helps. Regards, Mugunthan Managing Director, India Avenue

On Why I wouldn't invest in India -