Investing in India

Abstract

Efficient market theory has far-reaching implications for the future of the market as it is premised on the fact that the creation of wealth is based on the optimal allocation of capital which is most likely to be achieved through the market. If the market can be relied upon to mirror economic signals, then it can also transmit useful signals to both suppliers and users of capital; the former in building up their investment portfolios and the latter in establishing the criteria for the disposal of funds. As market orientation is being introduced to the Indian economy, it would be appropriate to indicate that it refers to international pricing indicators. The assumption is that, by doing so, India can open itself to the global market and exploit its competitive advantage through trade.