ETF Spotlight: INDA Captures India’s Big Growth Potential

The iShares MSCI India ETF (INDA) is capturing investor attention as India’s rapid economic growth positions it as a potential successor to China in the realm of emerging markets. 

While China’s economic growth is slowing and president-elect Donald Trump’s proposed tariffs loom, India’s large, youthful population is set to see a surge in workforce growth, fueling demand across sectors like technology, consumer goods, and financial services. 

Additionally, India’s governmental reforms, expanding digital infrastructure, and increasing foreign investment make it an attractive investment destination.  

For those looking to diversify internationally, INDA offers a straightforward way to gain exposure to some of India's largest and most influential companies, such as Reliance Industries and Tata Consultancy Services, which could drive strong returns over the next decade. 

What Is the INDA ETF?

The INDA ETF, or iShares MSCI India ETF, provides investors with broad exposure to Indian equities, tracking the performance of the MSCI India Index. Issued by BlackRock, this ETF includes large- and mid-cap Indian companies across sectors, making it a popular choice for those looking to tap into India’s growth potential in areas like financials, information technology, and consumer goods. 

INDA's holdings are diverse, with leading companies such as Reliance Industries and Infosys. This ETF can be attractive to investors seeking to diversify internationally, especially given India’s projected economic growth and favorable demographic trends. However, investing in INDA also carries risks related to emerging markets, including currency fluctuations, regulatory changes, and economic volatility. 

While there are 17 India ETFs on the market, including funds like the popular WisdomTree India Earnings Fund (EPI), and the top-performing iShares MSCI India Small-Cap ETF (SMIN), INDA is the largest with over $10 billion in assets under management and one of the cheapest with an expense ratio of 0.65%. 

See our related article: 10 Best Emerging Markets ETFS of 2024 by Performance 

INDA: Time to Invest in India’s Growth Potential?

India ETFs like INDA can be a convenient means of investing in the South Asian country, which is often highlighted as having the best growth potential among emerging markets over the next decade due to its combination of demographic advantages, rapid technological adoption, and favorable economic policies.  

With a young, large population, India is poised for strong workforce growth, which can drive economic expansion and innovation in areas such as technology, healthcare, and infrastructure. 

In addition to demographic factors, India has seen significant investment in digital infrastructure, making it an attractive destination for technology companies and investors. 

Furthermore, its economic reforms, aimed at streamlining regulations and promoting foreign investment, are expected to enhance productivity and attract capital inflows. Challenges remain, including infrastructure needs and bureaucratic hurdles, but the country's long-term growth trajectory is promising.