With its chronic blackouts, crumbling roads, and other infrastructure woes, India should have no appeal for John Ginascol. A vice president at Abbott Laboratories(ABT), Ginascol is responsible for ensuring that the company’s food-products factories run smoothly worldwide. He can’t afford surprises when it comes to electricity, water, and other essentials. “People like me,” he says, “dream of having existing, good, reliable infrastructure.”

Yet Abbott has just opened its first plant in India, and Ginascol says there haven’t been any nightmares so far. In October the company began production at a $75 million factory in an industrial park in the western state of Gujarat. The factory is producing Similac baby formula and nutritional supplement PediaSure, which Abbott plans to sell to the growing Indian middle class. The plant will employ about 400 workers by the time it’s fully up and running next year. As for India’s infrastructure, Ginascol has no complaints. The officials in charge of the park “were able to deliver very good, very reliable power, water, natural gas, and roads,” he says. “Fundamentally, the infrastructure was in place.”

Indian Prime Minister Narendra Modi is hoping other executives will be similarly impressed with the ease of manufacturing in his country. Before Modi took charge in New Delhi, he headed the state government in Gujarat, and during his 13 years in power there he made the state an industrial leader. Manufacturing accounts for 28 percent of Gujarat’s economy, compared with 13 percent for the country as a whole, and a touch less than the 30 percent figure for manufacturing titan China.

In an attempt to build India’s industrial base nationwide, Modi is pushing the Make in India campaign, designed to attract foreign investment by highlighting the ongoing changes. “We have to increase manufacturing and ensure that the benefits reach the youth of our nation,” Modi tweeted after the initiative’s Sept. 25 introduction. By now he’s eased restrictions on foreign investment in property projects and begun an overhaul of the railroad system.

In the year ahead the prime minister’s campaign may gain momentum, thanks to the shifting fortunes of India and its neighbor China. The Indian economy, which slumped badly in 2012 and 2013, will likely grow 6.3 percent next year, in part because of investor confidence in Modi. By 2016 the country’s growth rate of 7.2 percent will surpass China’s 7.1 percent, says CLSA senior economist Rajeev Malik.

David Fuller's view

I have talked about India practically every day this year but no apologies for this as its stock market is up over 32% in USD, thanks to Narendra Modi’s vision and majority election victory. 

Is India the best stock market investment for the next several years?  I think so and if not, it will certainly be one of the best performers while Modi is in charge.  The potential is breathtaking, as the article above helps to explain.  First class leadership, massive population, but primitive infrastructure - although this can be improved rapidly with good governance and inward investment, as India is now seeing.