Betting on the Bombay Bourse PUTTING YOUR MONEY TO WORK IN INDIA ISN'T A CINCH, BUT THERE ARE WAYS TO REDUCE THE RISK.
By Michael V. Copeland

(Business 2.0) – So you missed the upside of Japan in the mid-1960s, South Korea in the 1980s, and China in the 1990s. Maybe you were too timid, or maybe your parents just didn't think a sixth-grader should be playing the international stock market. Either way, you could have made a killing.

Is now the time to invest in India? There's certainly plenty of risk, including volatile domestic politics, an uneasy peace with Pakistan, and an agricultural economy that depends on unpredictable monsoon rains. While the Indian stock market was up an incredible 101 percent in 2003, a recent sell-off has pushed values down 18 percent this year. No telling whether that's a buying opportunity or a fool's gambit.

If you do decide to take the plunge, there are only a few ways to play--the Indian government doesn't let foreigners buy local shares. The easiest route is through American depositary receipts of the 11 Indian companies trading on U.S. exchanges, such as blue chips Wipro and HDFC Bank.

But unless you know a lot about a particular company and can follow it closely (www.indiainfoline.com is a good place to start), you'll want the reduced risk that funds offer. While there are only three that invest exclusively in India, you can also buy into the subcontinent through emerging-markets mutual funds that carry significant Indian exposure. -- MICHAEL V. COPELAND