Despite India’s Optimism, There May Be a Better Time to Buy

BY MARTIN HUTCHINSON, Contributing Editor, Money Morning

The Indian government announced Monday that the country's economy was expected to expand by 7.2% during the fiscal year that ends next month.

Agriculture - which had been expected to be a major drag on the economy because of a poor monsoon season - contracted a mere 0.2%. That is a truly stellar performance, showing that India - like China - has emerged almost unscathed from the global economic meltdown. It would pretty well justify the Bombay Stock Exchange Ltd.'s rich Price/Earnings multiple of 20 and would make Indian stocks a "Buy" even at these levels.

Unfortunately, when looked at closely, the picture is not quite so rosy.

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