A year ago, I identified India as “The Next Great International Growth Market.” I said then, “There is a lot to like about India from an investment perspective. Its population of 1.4 billion is tied with China as the biggest in the world, comprising nearly 18% of all the people in the world.”

I further noted, “In addition, its fertility rate of 2.0% is far above China’s 1.2 rate. Also, its median age of 28 is eleven years younger than China’s median age of 39. That bodes well for the future.”

To profit from that promising future, I suggested buying shares of the iShares MSCI India ETF (INDA). The fund’s objective is “to track the results of an index composed of Indian equities.”

Its top holdings are companies you’ve probably never heard of if you’ve never traveled to India. That doesn’t matter. What does matter is that they are considered the best companies in the world’s fastest growing developed economy.

So far, that recommendation is looking good. Late last year INDA broke above its intermediate-term technical resistance around $45.

Since then, it has risen steadily. Eleven months after that article was published, INDA is up 29%.

No Comparison

One week after I published that article, I declared “This Company May Become the Tesla of India.” That company is automaker Tata Motors Limited (TATAMOTORS.NS), India’s third biggest seller of cars.

Since then, it is up more than 50%. Much of that gain is due to the company’s aggressive pursuit of the electric vehicle (EV) market in India.

That market is currently small but has enormous growth potential. Last year, EV sales accounted for roughly 5% of total vehicles sales in India.

According to a recent report, EV sales are projected to reach 40% of total vehicle sales by 2030. By then, total EV revenue in India should exceed $100 billion.

Despite those gaudy numbers, Tata Motors is valued at less than six times forward earnings compared to a multiple of 22 for the S&P 500 Index. Its price-to-sales ratio of 0.5 is far below the 2.4 multiple for the index.

I don’t expect that discrepancy to last much longer. Sooner or later, the professional money managers on Wall Street will realize they are overlooking one of the great growth stories of this decade.

Only 42% of Tata’s float, or shares trading on public exchanges, is held by institutional investors. At the same time, they hold 93% of General Motors (NYSE: GM) float.

That makes no sense to me. General Motors is a relatively small EV player in a crowded domestic market. Meanwhile, Tata Motors is the clear leader in a much bigger national market with fewer competitors.

Golden Era

Despite its rapid rise, I don’t expect Tata Motors to slow down anytime soon. For that matter, I expect INDA to keep performing well, too.

In case you’re wondering, Tata Motors is not a large holding of that fund. It accounts for approximately 1.4% of the fund’s total assets, ranking it 15^th.

That means there are a lot of other companies in India that are also performing very well. India’s rapidly growing middle-class population has disposable income to spend on a wide variety of goods and services.

That is why I believe India is in the early stages of a golden era similar to the post-World War 2 era in the United States. During the 1950s, the Dow Jones Industrial Average tripled in value. I think the next ten years could be just as lucrative for the Indian stock market.

With the major U.S. stock market indexes at all-time highs, now might be a good time to look abroad for diversification. And one of the first places you should consider looking is India.

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