Dense and diverse population
India has the second largest population in the world. In terms of geographic area, India is the seventh largest country. India is densely populated.
To determine a population’s broad density, we divide the total number of people by the country’s area in square kilometers—or square miles. India has over 950 people per square mile. To put this into perspective, as of 2013, the US had ~85 people per square mile.
In India, the population is divided among 29 states and seven union territories. Its population is very diverse. According to India’s census data in 2001, there are six major religions in India. India’s constitution recognizes 22 different languages. This doesn’t include different dialects and other unrecognized language variations.
India’s geography and weather are also diverse. The northern region in the country has the Himalayas—a vast mountain range that spreads from the north to the east. It also has the fertile Ganges Plain—the country’s best farmland. The Thar Desert is in India’s western region. In contrast, the southern region has tropical rain forests. It also has the Andaman and Nicobar islands.
As a country, India experiences a diverse range of weather because of its geographic location.
A young nation with a large market
Looking at India’s demographics, you can see that it’s a young nation. According to census data in 2011, 58.3% of the population was below 30 years old. In contrast, 17.6% was between 20–29 years old. Over 31% of the population was urban. Nearly 42% of the urban population was 20–44 years old.
So, what does all of this information have to do with India being an attractive investment destination? The diverse culture, weather, and geography make India an attractive tourist destination. This leads to to revenue for the government. More revenue boosts India’s gross domestic product (or GDP). Also, analyzing the population shows that India has a young working population. This ensures cost-effective labor and an army of willing consumers.
The global investing population is interested in exchange-traded funds (or ETFs) that focus on India. The WisdomTree India Earnings Fund (EPI) has $2.1 billion in assets. The iShares MSCI India ETF (INDA) has over $1.5 billion in assets. There are also the iShares S&P India Nifty 50 Index Fund (INDY), the PowerShares India Portfolio (PIN), and the iPath MSCI India Index ETN (INP).
In the next part of this series, we’ll look at India’s political structure.