Investors looking for the next big opportunity lately have turned their eyes and ears to the Asia Pacific. China is getting plenty of attention from investors, but perhaps the more stable success story can be found in neighbouring India.

India has one billion people, a huge and growing middle class, well established educational, judiciary and accounting systems, a democratic government, and a large English speaking population. “All that is there and it’s all going to take India to the next level,” says Bhim Asdhir, president and CEO of Excel Funds Management Inc., manager of the Excel India Fund. The fund boasts a healthy return of 69.5% for the 12 months ended May 31, 2004, and a three-year return of 18.3%.

Speaking at a breakfast meeting today in Toronto, Asdhir quoted both Bill Gates and Bill Clinton in his presentation to demonstrate the country’s leadership in areas like research and technology, and the sheer size of its economy. “100 years ago the U.S. was not the world’s largest economy, but if you’d invested 100 years ago, you would’ve done very well,” he says. “The same kind of opportunity today exists in India.”

The growth story is a positive one with almost a quarter of the world’s youth living in India, driving the fourth largest economy in the world. According to figures presented by Birla Sun Life, a joint partnership between the Aditya Birla Group and Sun Life Financial, Indian household savings to GDP is 25%, and debt is very low with only 5 million credit cards in the country compared to 170 million bank accounts. “We think it is only the beginning,” says S.K. Mitra, director of financial services at the Aditya Birla Group in Mumbai (formerly Bombay), India. “We’ve only just started the process of growth.”

The next big area of growth in the country, he says, is the textiles industry. “Ten years ago analysts were only interested in IT.” He says with the removal of trade barriers, he expects the area is ready for growth.

Compared to China, with its restrictive policies on foreign investment, Mitra says India has always been an environment open to foreign investment. “Almost no multinational has ever lost money in India. You really need to do badly to lose money in India,” he says. “If you look at the long term story, there’s only one way things can go unless something catastrophic happens.”

Despite having supportive demographics, a strong economy, and a positive business environment, the country is still subject to risks like monsoons, oil prices, the country’s high fiscal deficit, and geopolitical risks along its boarder with Pakistan.

Although the population in agriculture is very high, it only makes up about 30% of the country’s economy, and that percentage, he says is going down sharply. Despite this, says Mitra “India is still very much dependent on the rain god.”

The most public of India’s risks is the threat of conflict with Pakistan. In his presentation, Mitra downplayed the conflict. “Economy is more important that politics,” he says. Films, music, cultural exchanges and businesses all continue to operate across the boarders. “We think these things will keep the governments under control.”