The sovereign wealth fund raised its Indian bonds and stock position to 0.9% of its fixed-income and equity portfolio in an attempt to increase its emerging market exposure and generate greater returns.

“India is one of those markets where you should expect that we will continue to increase our investments over time, significantly,” Yngve Slyngstad, chief executive officer of the fund, said. “Relative to the size of the economy our investments are smaller than you would expect.”

Since being elected, Modi has turned to market-based energy pricing, increased foreign investment in the defense industry and revitalized the manufacturing sector.

“The changes that we have seen have given us more confidence that we will have good investment potential in the coming years,” Slyngstad added. “We will continue to increase our investments there, both on the fixed-income side and in regards to our company investments.” [Buying the Dip in India ETFs]

India’s economy is expected to expand 5.5% in the fiscal year through March 2015, compared to the 4.7% growth over the previous period but still lower than the average 8.7% between 2006 through 2010.

For more information on India, visit our India category.

Max Chen contributed to this article.

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