India today is reaching new heights every day in various economic fields. In the first week of December 2023, India had achieved fifth position in the world in terms of stock market capitalization, leaving behind France and Britain. Only America, China, Japan and Hong Kong were ahead of India. But now, in less than two months, India has overtaken Hong Kong and achieved the fourth position in the world in terms of stock market capitalization. The capitalization of the Indian stock market has reached more than US$ 4.35 trillion. Now it seems that India is regaining its lost prestige at the global level in the field of economics. From 1st AD to 1750 AD, India dominated the entire world economically. During this period, India’s share in the total foreign trade of the world was more than 32 percent because at that time trade was done in India following Sanatan culture. In India, the practice of performing Karma and Artha works while following Dharma is described in ancient scriptures. Since today once again in India, work is being completed in various fields by following the Sanatan culture, the confidence of the whole world in India is increasing, therefore, not only foreign financial institutions but also foreign citizens are investing their money in India’s capital (share) market. We are continuously increasing the investment.
The level of total market capitalization of all the companies listed on the National Stock Exchange in India reached the level of 2 trillion US dollars in July 2017 and after about 4 years i.e. in May 2021, it crossed the level of 3 trillion US dollars and Only after about 2.5 years i.e. in December 2023, it had crossed the level of 4 trillion US dollars and today it has crossed the level of 4.35 trillion US dollars. Thus, today India has come to fourth place in the world in terms of stock market capitalization.
In the first place is the American stock market, whose capitalization is more than 50.86 trillion US dollars. At second place is China’s stock market whose capitalization is more than 8.44 trillion US dollars. In the year 2023, China’s stock market has given negative returns to its investors. In third place is Japan’s stock market whose capitalization is more than 6.36 trillion US dollars. In fourth place is India’s stock market, whose capitalization is more than 4.35 trillion US dollars. At fifth place is Hong Kong’s stock market, whose capitalization is 4.29 trillion US dollars. Due to the fast pace at which the capitalization of the Indian stock market is progressing, it is now expected that after some time, the capitalization of the Indian stock market will overtake the capitalization of the Japanese stock market and come to the third place in the world.
Indian stock market has become a center of attraction for foreign investors today because the Indian stock market is giving huge profits to its investors. In a recently conducted survey, it has emerged that the world’s 100 biggest investor funds, whose assets are more than US$ 26.25 trillion, have talked about increasing their investments in India instead of China. After India, these funds are talking about their investments in Brazil and China. In the year 2023, various foreign investor funds have invested US $ 2000 crore in the Indian stock market. During the last 8 consecutive years, the Indian stock market has given profits to its investors whereas many big markets of the world like China, Hong Kong and Japan have not been able to give these profits consistently. The Indian stock market has given a profit of more than 10 percent to its investors in the year 2023.
India is emerging as an engine of development in the world. The International Monetary Fund has said that India’s contribution to global GDP growth in the year 2024 is going to be more than 16 percent. When the growth rates of other countries are slowing down, the economic growth rates in India are accelerating. All this is possible due to the economic policies being implemented in the country by the Central Government. This is possible only because of the growing base of temple economy and religious tourism in the country. When India’s growth rate is increasing, the business of companies working in manufacturing and other sectors in India is also increasing and the price of shares of these companies is also increasing in the Indian capital market. Therefore, foreign citizens including foreign institutions are also getting attracted towards India with the aim of earning more returns on their investments. Foreign investors and foreign institutions, who were withdrawing money from the Indian stock market till the month of September 2023, are now suddenly investing huge amounts of money in the Indian stock market. Today, many times, more than Rs 5000 crore are being invested in the Indian stock market by these foreign investors in a single day.
The Central Government is often accused by the opposition parties that government undertakings are being abolished in India. Whereas during the last 27 months, the capitalization of government undertakings has doubled in the stock market to more than Rs 46.40 lakh crore. Public sector undertakings have recorded incomparable growth in their market capitalization during this period. Bombay Stock Exchange’s Sensex has crossed the level of 60,000 to 70,000 in the last 27 months. There has been a huge improvement in the corporate governance of these PSUs, due to which the confidence of not only foreign investors but also Indian institutional investors and retail investors on these PSUs has increased.
Due to various reform programs being continuously implemented by the Central Government in the economic sector, foreign institutional investors, foreign retail investors and citizens of Indian origin living abroad are also investing in large quantities in Indian companies through the stock market. In recent times, there has been an incomparable increase in the profitability of Indian companies, due to which various financial ratios of these companies have become very attractive. Whereas stock markets like China, Hong Kong, Britain, Japan are able to give negative or very low returns to their investors. Many foreign institutional investors are withdrawing their capital from countries like China, Hong Kong etc. and investing in the Indian stock market. There is a strong possibility that the growth rate in the Indian stock market will remain attractive in the future also.
It is said that an investor invests his savings in the stock market very thoughtfully and when investors start to realize that the future of a particular company is very bright and the return on the investment made by the investor is likely to be maximum, Only then investors invest their savings in that particular company in the stock market. Thus, when investors’ confidence in the economy of any country appears to be increasing, then especially foreign investors and foreign institutional investors increase their investments in the shares of various companies in that country. Since foreign institutions have full confidence in the Indian economy and the growth journey of Indian companies in the times to come, investment in the Indian stock market is also gaining momentum.
Retired Deputy General Manager
state Bank of India