• India is a fast-growing emerging market.india flag icon. (with clipping path) image by Andrey Zyk from Fotolia.com
  
  Investors tend to think of China when it comes to investing in fast-growing economies. However, India has gained a head of steam, as well. According to Aaron Levitt, an independent investment writer, India is one of the strongest growth-based global economies, and India could pass the United States by 2025. Many Indian companies are not traded on a stock exchange. Investors can gain access to India through various mutual funds.
  
  

India's Growth Potential

• India is one of the so-called BRIC (Brazil, Russian, India, and China) countries. These nations represent four of the fastest-growing emerging market economics. In 2003, Goldman Sachs reported that the BRIC nations will become wealthier than developed countries by 2050. Furthermore, India will become a dominant global supplier of manufactured goods and services. It is clear that India will continue to grow as the U.S. is its largest trading partner. India can use its manufacturing strength and help the U.S. build new infrastructure and power grids. This can add an additional two percent to India's gross domestic product (GDP). Investors can potentially profit from India's growth by utilizing one, or more, of the Indian mutual funds.
  
  

India Mutual Funds

• Mutual funds that hold Indian securites give the investors access to the growing economy. For instance, the Franklin India Growth Fund (FINGX) by Franklin Templeton invests in Indian securities and companies that receive revenue from India's economy. This fund had an annual return of 24.32 percent as of June 30, 2010. Morgan Stanley's India Investment Fund (IIF) invests largely in India's financial, oil and gas, and manufacturing sectors. This fund was also kind to investors gaining 44.65 percent (6/30/2009). Furthermore, India Investment Fund (IIF) outperformed the Standard & Poor's 500 index by 5 percent (7/26/10).
  
  

Foreign Direct Investment

• Foreign direct investment is capital foreign investors are willing to invest, and risk, in a particular region. This influx of capital can help growing economies. In 2009, over $17.5 billion in foreign direct investment was made in India, and India experienced a 7 percent increase in economic growth in the fiscal year ending March 31, 2010. It makes sense to include India within a portfolio as long as it continues to develop both fiscally and socially to sustain growth. India's growth can be contributed to a young, educated workforce; and potential portfolio growth can come from Indian holdings.