"The one key thing in India that is changing and changing for the better is inflation," which has been primarily driven by food and energy prices, Laxminarayan said.
The decline in oil prices has been a "gift," he said, adding "food is being addressed very aggressively both in terms of how food is being sourced, how it's being stored and how it's being distributed."
Around 40 percent of India's fresh produce spoils before reaching markets, according to estimates from the U.N.'s Food and Agriculture Organization, while around 21 million metric tons of wheat – equal to around all of Australia's production – is wasted each year due to inadequate storage and distribution, according to a government study.
Improving this inflation picture means that India's interest rates – currently set at 8 percent by the Reserve Bank of India – can come down, Laxminarayan said, offering the next catalyst for growth.
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The opportunity may be in bonds as well as stocks.
"We are investing into India as a non-benchmark exposure," said Cecilia Chan, chief investment officer for fixed income in Asia at HSBC. She cited positives from the recent election results, with reform-minded Prime Minister Narenda Modi taking power and his party garnering solid support in state-level elections last month.
While past volatility in the rupee has deterred foreign investors from investing in the country's bonds, "we think it will not be as volatile as before [and] that it will gradually appreciate or stabilize," Chan said, adding HSBC views the currency as undervalued. She expects "good yield carry" from India's bond market, especially as the rupee tends to be less correlated with the U.S. dollar, which is widely expected to continue appreciating.
To be sure, some believe the market rally might be getting a bit long in the tooth.
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