Relative to large EM peers, after Technology broadly, India is our top country pick because it offers a combination of value, growth, low currency risk and credible policy, albeit it is a shadow of the 'incredible India' of the past decade.
Within the Technology part of large EM, India Tech and Korea-Taiwan Tech Hardware offer more value relative to history than China Tech Apps. The agriculture laws demonstrate that Prime Minister Modi is willing to use his political mandate for much-needed structural economic reform, rather than divisive social reform.
However, the farmers' protest (and subsequent Supreme Court suspension of the laws) show the effective resistance of vested interests to such reforms and is a concerning precedent for the long 'to do' list that remains.
In addition to the risk of resistance to needed reforms (or the prioritisation of divisive ideology), there is the need for a return to fiscal control post-Covid-19, potentially higher military spend in the growing friction with China and very aggressive consensus expectations on earnings growth.
Below, we present seven charts to mark India's 72nd Republic Day on 26 January and summarise the equity investment case.
(We define large EM peers as Brazil, China-HK, Korea, Russia, Saudi, Taiwan, South Africa – those countries with over a 2% weight in MSCI EM).
1. India equity valuation versus EM peers

2. India Tech versus EM peers

3. PM Modi's legislative mandate for reform

4. India needs structural economic reform

5. Fiscal control risk

6. Military spend risk

7. High expectations risk

Related reading
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China manufacturing is irreplaceable but India and other Asians can win share (June 2020)
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India: Trump-Modi grandstand more likely than grand trade deal (Feb 2020)
India: From incredible to in trouble? No, just in between (Dec 2019)
India, Pakistan: Kashmir flares up, same end-game (no hot military conflict) (Aug 2019)