THE Indian stockmarket is once again attracting investors from abroad. Most of them believed that the excesses of last year had been wrung out of the market, said Brian Brown, associate director of W. I. Carr. W. I. Carr has been operating a research office in India for the last three years, and Mr Brown said that the market was now showing good signs of recovery. Investors were hoping to take advantage of the improving economic situation. The combined effects of a good monsoon, rising exports, low inflation, and improving corporate results had increased interest in the Indian market, he said. What makes India an attractive proposition to foreign investors is that India already has a well-developed stockmarket, according to Ayaz Ebrahim, investment manager with Indosuez Asia Investment Services. There are 22 separate exchanges, one over-the-counter exchange in Bombay, and 6,000 listed companies. Many predict that with foreign investors coming in, market capitalisation of US$60 billion will double in the next couple of years. Among the international funds which invest in the Indian market are the Himalayan Fund run by Indosuez Asia Investment Services; the India Fund, managed by the Unit Trust of India (UTI) and advised by Merrill Lynch; the India Growth Fund, also run by UTIand Merrill Lynch; Jardine Fleming's India Pacific Trust fund; Magnum Fund from Morgan Stanley; Indian Opportunities set up by Martin Currie; and Bombay Fund run by Barclays De Zoette Wedd. One of the more established funds is the Himalayan Fund. It was about 78-79 per cent invested in India, 15 per cent in Sri Lanka, 2.5 per cent in Bangladesh, and the balance held in small cash, Mr Ebrahim said. Since January 1991, the fund has risen by 80 per cent. In India, the fund focuses on large second liners as they are more promising. The Merrill Lynch International-advised and Unit Trust of India-managed India Fund was incorporated in July 1986 in Guernsey and listed in London. Denominated in pound sterling, all income distribution from the fund is subject to 10 per cent Indian withholding tax; redemption of shares in the fund will be subject to a 10 per cent repatriation withholding tax. In the first six months of this year, its price outperformed the index by 15 per cent. The India Growth Fund is managed by Unit Trust of India, again with help from Merrill Lynch. Listed in New York, it was incorporated in the United States in August 1988. The fund pays out at least 90 per cent of all income in the form of dividends and realised capital gains to keep its status as a US investment company and avoid paying any corporate taxes there. A conservative fund, it invests almost 70 per cent in the top 20 shares. While its net asset value (NAV) fell 15 per cent in the six months to June this year, it has increased about 65 per cent since January 1991. Jardine Fleming's India Pacific Trust is one of those which has generated a lot of recent interest. Started in 1989, from May this year the fund gained total capital gains tax exemption by domiciling in Mauritius to take advantage of its double taxation treaty with India. Its NAV rose 106.9 per cent in the seven months to July 30, while in the last year it has risen 91.3 per cent and 85.9 per cent over the last three years.