Jefferies says it will be impossible for large investors to ignore India. Here's why

India’s stock market value is set to more than double to $10 trillion by 2030, going by its history of delivering double digit returns and expectations of continued economic reforms, according to Jefferies.

If the nation’s track record of generating annual returns of 10% in dollar terms over the past two decades holds up, India’s market will be “impossible for large global investors to ignore,” the brokerage said in a note.

The biggest risk? It will be how well it has done of late.

Jefferies expects India’s GDP to touch $5 trillion by 2027, putting the nation’s economy ahead of Japan and Germany thanks to tailwinds of demographics, institutional strength and improvement in governance standards.

Wood expects India’s contribution to world real gross domestic product (GDP) growth to reach 7.7 per cent by 2028, based on IMF projections, which assume only an average 6.3 per cent real GDP growth in India for the next five years. 

From a 10-year view, Jefferies believes India to be the best equity story in the world.

The upcoming Lok Sabha elections later in 2024, Wood believes, will see the Narendra Modi-led National Democratic Alliance (NDA) come back to power, and such an outcome is no longer 'far-fetched'.

"It should be assumed that Prime Minister Narendra Modi’s goal will be to win a record number of seat for his BJP party. Such an electoral outcome is no longer far-fetched. As for the Congress Party, the dominant political party in India since independence in 1947, it faces an existential crisis," Wood said.