You've heard the hype: India is growing ... fast.

But who is really putting their money where their mouth is? More important, where is it going?

Kenneth Fisher and Jean-Marie Eveillard are just some of the legendary names getting a piece of the action. Need proof? Peer into Fisher's investment into ICICI Bank (NYSE:IBN).

While my own perspective may be biased (I've spent a great deal of time in India and like its prospects), you can't ignore the millions these gurus have invested.

The dawn of an economic empire
Goldman Sachs
issued a report in 2003 predicting that India's economy will be the world's third largest by 2035. The report cited expected annual growth rates of 5.3% to 6.1%.

Are you kidding me -- 6.1%? Since 1996, the nation has averaged more than 7%. Currently, India is pumping out near double-digit GDP growth.

Though it has been a bumpy ride as of late, India has the potential to fulfill these optimistic promises. Unfortunately, I'm about as confident in "potential" macroeconomic projections as I am in my own ability to read the future. After all, questions about economic reform, infrastructure, and education must be addressed first.

But if these projections are even close, the Indian stock market will show you the money.

China vs. India: showdown of the 21st century
The real question is: How much of these two looming giants should you have? Both are growing at accelerated rates, so it's not a simple decision. You really need both -- a good piece of China will pay off over the next few decades.

That said, I look to India to exploit an edge: its commitment to the democratic process. Yes, this may sound cliche. India's government has long been criticized for extended periods of unremarkable reform. Yet I prefer it.

Eager to highlight China's swift ability to prioritize resources -- often at the expense of its own citizens -- most experts give China the advantage. If the government needed to blow through a few neighborhoods to make room for the Guangshen Railway (NYSE:GSH) company—POOF—it'd be done.

If our own local governments could operate with that kind of unencumbered authority, we'd have fewer potholes, failing public schools, and congested roadways. If more and more of our parks and forests were made available to energy companies like Peabody Energy (NYSE:BTU), our coal reserves would swell massively—which they likely will in years to come. But this is simply not how our government works—and I like it that way.

Advantage: India
Long term, India's commitment to democracy and free markets are a massive benefit. The economies of Brazil, Taiwan, South Korea, and yes, even the United States can testify to that.

At its simplest, India is attempting to build a foundation of sustainable yet powerful growth. And it is doing it through a functional democratic process, which is accountable to its citizens.

Taking stock
When it comes down to companies, India has some specific areas of critical advantage. The IT outsourcing world has been hit before. But I think Satyam is still an intriguing investment opportunity that has been tremendously volatile as of late. The company is closing in on becoming the developing world's first global consulting firm -- similar to IBM's (NYSE:IBM) role in the tech consulting industry. In the financial world, our Global Gains team of analysts picked up on two Indian banks (ICICI was one) that have posted strong financial performance of late. The other, HDFC (NYSE:HDB), continues to be an intriguing investment in a country that is building wealth quickly.

Attacking its own content-hungry consumers, has created a strong online presence that is beginning to resemble Microsoft's (NASDAQ:MSFT) MSN site in its early years. Rediff is certainly not on the same scale of popularity or profitability yet; it may be getting there soon. If you are paying attention to SINA (NASDAQ:SINA) in China, you might want to look into as well.

Investing legends have picked up on India's potential. So should you. If you'd like to do just that, the Motley Fool Global Gains team is here with precise advice. Click here to try the service free for 30 days.

This article was first published Sept. 28, 2007. It has been updated.

Fool analyst Nick Kapur owns no shares of any stock mentioned in this article, though he is invested in India. Satyam and SINA are Stock Advisor recommendations. Microsoft is an Inside Value selection. HDFC Bank is a Global Gains pick. The Fool has a disclosure policy.