State-Sponsored Digital Services Turbocharge India’s Growth

India’s growth is on track to make the country the world’s fastest-growing big economy in 2022 as tech costs have dropped and the country has unveiled a series of state-sponsored digital services nationwide that connect its residents with an electronic identity, payments and tax systems, and bank accounts.

“The rapid adoption of these platforms is forcing a vast, inefficient, informal cash economy into the 21st century. It has turbocharged the world’s third largest startup scene after America’s and China’s,” The Economist noted.

Christopher Wood, global head of equity strategy at Jefferies, said in an interview with CNBC-TV18 earlier this month that he believes India is the best equity story globally, citing the country’s large captive domestic consumer market and the recent price correction of new-age technology stocks as reasons for his optimism.

Several new-age tech stocks, which hit the domestic equity market last year, have dropped more than 50% to 60% in the past few months, which has made the sector increasingly attractive to global investors.

“These are the stocks you want to buy when you think that U.S. monetary policy tightening is discounted,” said Wood.

Increasing Indian Allocations

Investors looking to increase their allocations to India’s rapidly growing internet and e-commerce sector may want to consider EMQQ Global’s Next Frontier Internet & Ecommerce ETF (NYSEArca: FMQQ) and the India Internet and Ecommerce ETF (NYSEArca: INQQ).

FMQQ seeks to provide investment results that, before fees and expenses, generally correspond to the price and yield performance of the Next Frontier Internet and Ecommerce Index ( Securities must meet a minimum of a $300 million market cap and pass a liquidity screen that requires a $1 million average daily turnover.

When the fund was launched in September, EMQQ Global founder and CIO Kevin T. Carter said that the goal of FMQQ was to “be an attractive alternative for investors who want to capture the budding opportunities in these ‘next frontier’ markets and/or complement their Chinese tech allocations and balance out their current portfolio weightings.”

India makes up 18.3% of FMQQ’s weighting as of May 24.

Last month, EMQQ Global launched INQQ to capitalize on the country’s rapidly growing digital and e-commerce sectors. In a news release announcing INQQ’s launch, Carter said: “India is an extraordinary investment opportunity and a central part of the eCommerce and digitalization growth story in emerging and frontier markets beyond China,” before adding: “India is the third-largest economy and fastest-growing major economy on the globe, and we’re excited to offer investors the first targeted approach to tap into this rapid eCommerce and digitalization story of India.”

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