India, which until now has been largely ignored by UK investors in favour of faster growing China, is about to takes its place in the spotlight.

Early next month New Star Asset Management, never shy at drumming up publicity for its new ventures, is launching a fund that invests in the sub-continent. It joins Jupiter Asset Management, which launched its own India fund in February. Neptune , First State and JP Morgan Investment Management also run Indian funds.

Given the flurry of activity, expect to be hearing a lot more about the “unstoppable” Indian growth story over the next few months.

The statistics are impressive: the Indian economy is growing at nearly 9 per cent a year and growth has been at least 4 per cent in 21 of the past 23 years; in the past two decades, India’s middle class has quadrupled to roughly 60m people and the numbers are growing by the day; India is also attracting considerable foreign investment from companies setting up businesses there - $12.7bn in the year to March.

But adventurous investors who want to take the plunge should go in with their eyes open. The Sensex, the principal share index based in Mumbai, fell a dizzying 23 per cent in the three months to the end of March.

It would be easy to dismiss this as simply the result of the credit crunch that has sent stock markets plunging worldwide. That is part of the story, but the drop in the Indian stock market has also been born out of concerns about rising inflation and worries about the outcome of next year’s general election.

Longer term, if the economic growth story is to continue India’s infrastructure needs massive improvement- and fast. Anyone who has visited Mumbai, the business capital of the country, will be all too aware that it can take hours on the City’s crowded roads to travel just 30km from the airport to the centre of town.

Power could also be a problem as the economy grows, just as it has been in South Africa. Only last week there were riots across northern India after power cuts left millions without electricity or water.

If you’re prepared to invest for the long term it makes sense to have a small exposure to the Indian market. But investors in India, or any of the other emerging powerhouses, should be prepared for plenty of turbulence along the way.

If you’re the kind of investor that’s scared of seeing markets fall 10 per cent in a day then it isn’t the region for you. You would be better off accessing India through a general Asia Pacific or emerging markets fund, as this reduces the likelihood of big losses should the Indian stock market take a tumble.

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