So as in the shampoo example, increased reach combined with higher margin products should equate to a strong underlying investment opportunity.
But for all the potential rewards associated with investing in emerging economies, this asset class does carry risk.
One major factor that tends to deter investors from allocating capital to India is the perceived lack of corporate governance.
The area of the Indian quoted market that best represents the health and growth prospects of the local economy is the small and mid-cap sector, where many businesses are family-owned.
Historically, this type of business structure is synonymous with a lack of concern for minority shareholders.
In addition, investing further down the market cap curve increases risks as there is often less transparency, lower liquidity and, very often, a more fluctuating shareholder base, which can lead to big swings in share prices.
So mistakes are made, and the question then arises, what to do next?
Risk of this sort is best mitigated by owning a manager, with ‘feet on the street’ who has knowledge and understanding of the underlying company fundamentals.
That way, when mistakes occur, either because the company fails to meet investors’ expectations or an event unconnected to the company itself causes the share price to swing, the manager is well placed to make a call, either to exit and preserve capital or buy more in order to take advantage of the lower cost price.
However, in 2017, Mr Modi passed The Companies (Amendment) Act in order to help improve such corporate governance issues and the ease of doing business in India, while continuing to strengthen compliance and investor protection.
Indian business owners are increasingly aware of the importance of working alongside minority shareholders to propel growth and increase returns for all stakeholders.
Choose the right structure
For UK-based investors, tapping into single stocks in EMs can be a complex process, but investment trusts offer an easier way to gain exposure.
Investing in a closed-ended permanent capital structure can provide beneficial returns while mitigating some of the volatility and price shifts common to EM equities.
This type of vehicle can also take advantage of less liquid opportunities in small and mid-cap EM equities, an area that can generate high returns over the long term.
As illustrated in the chart, over the past 15 years, Indian mid-cap stocks have compounded at an impressive 13 per cent a year in US dollar terms, almost double that of the MSCI World index over the same period.
To truly take advantage of India’s growth, investors should get in early before valuations reach sky-high levels.