What India's Blackout Shows Emerging-Market Investors

In today's edition, Austin Smith and Andrew Tonner discuss what the blackout in India shows emerging-market investors. For all of the potential that lies ahead for India, this event really underscores the lack of reliable infrastructure in the nation, and just how far it's behind other emerging-market peers in this enormously important category. For example, India has just a hundredth of the roads China does, despite having a similar population.

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Andrew Tonner has no positions in the stocks mentioned above. Austin Smith owns shares of Unilever. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services recommend Starbucks and Unilever. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On August 03, 2012, at 8:56 PM, matthewluke wrote:

    I agree that India's infrastructure in general is awful (power, roads and such), but a blackout itself is hardly a emerging market-only problem. We and Canada had a major blackout just about 10 years ago that knocked out power for 50-60 million people.

    Also quick question: China roads vs. India roads. You hear all the time about China building ghost cities and roads with nobody actually using them. I'm not sure how exaggerated those reports are (as I don't follow China that closely), but wouldn't that account for some of that discrepancy?

  • Report this Comment On August 03, 2012, at 10:22 PM, TMFBWItime wrote:


    Thats a fair point you bring up, but with a roughly 100/1 ratio, it really can only account for so much of the difference.

    Having traveled to both countries I can say that my experience confirmed that India has enormous potential, but is more than a decade behind China with regard to infrastructure and development.

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