Wondering where next to put their billions of dollars of investment asset, hedge fund managers and other delegates in Bermuda had their heads turned towards India earlier this week.

They were told about its mostly "young and vibrant" 1.2 billion people. Sarvjeev Singh Sidhu said: "India is eager to participate in the global marketplace. Its stock market is up 50 percent. The currency is up between 12 and 15 percent this year.

"There is a real story here of India trying to regain its place in the global world."

Mr. Sidhu was moderator of a strategy session at the 14th Annual MARHedge Global Hedge Fund Summit held at the Fairmont Southampton, which attracted hundreds of international delegates and had former US Federal Reserve chairman Dr. Alan Greenspan as a keynote speaker.

Immediately following Dr. Greenspan's appearance, the Mid-Ocean Ampitheatre hosted a session entitled 'India - Understanding the real and perceived opportunities and risks,' and one of the first questions raised related to the world famous economist's concern of a growing risk of a US recession.

What impact might such a recession have on Indian assets? Mr. Sidhu asked the panel.

Anu Sahai, managing principal of Anew Capital Management, said: "A lot of (capital) flows into India have been from the US and Europe. If we saw a slowdown in the US we would not see a big impact because the domestic market in India is fairly buoyant."

The robustness of the Indian economy allows it to ride out external economic downtrends, thanks to the country's immense population and the increasing domestic wealth, she said, adding: "The Indian consumer is driving the growth in India. India will continue to grow on its domestic demand."

Mike Moran, a senior financial strategist with Standard Chartered Bank, was supportive of recent moves by central banks to take a stronger line on India's currency appreciation.

"The new rules are not draconian. It is not about restricting the flow of money, it is about transparency and tracking the money coming in," he said.

Mr. Moran feels the surge in India's economy is sustainable in the long run, although the rapid strengthening of the Indian currency is likely to lead to an impact on the country's export business.

"The Asian banks have learnt you can't stop your currency appreciating. We are not looking at a US recession, but a slow down," said Mr. Moran.

"We do not subscribe to the view of Asian immunity (from US recession). Asia will suffer, but not to the extent it did between 1998 and 2002."

He predicted that after a weakening of the Asian currencies in the short term they will begin to strengthen again in the early part of 2008.

Another panelist, Dr. Punita Kumar-Sinha, who is a senior managing director of The Blackstone Group, said the subprime credit crunch in the US financial market had actually helped the India economy and other emerging nation economies.

"There was a concern there was going to be a reduction in the risk markets. But everybody is looking to places where there is significant growth. So all the money that could have gone to the US is making its way to Asia, to India and China," she said.

Dr. Kumar-Sinha said that, even if there was a US recession that impacted the export economies of India and other Asia nations, it should be viewed in a positive way.

"Growth is continuing because more and more (money) people are running away from the US."

Equity funds and the convertible bond market remain the main investment avenues for foreign investors looking to get involved in the Indian economy. Investors are also viewing Asia currency baskets as investment vehicles.

Ms Sahai said: "Convertible bonds are a very attractive route. But private equity is also becoming very big. Companies and investors are going into infrastructure and development. Small-cap companies are becoming mid-cap and mid-caps are becoming large-cap and we will continue to see that."

Dr. Kumar-Sinha added: "Indian companies have been going overseas to list and that is an increasing trend. Futures are being traded on the Singapore exchange. So foreigners are coming to India, but India is also going to the foreigners."

As for risk factors to the India economy, Dr. Kumar-Sinha said: "The biggest risk is how does India manage the growth? There is not that much talent and there is a need for education to sustain the growth. There is also the wage drive which can hurt the competitiveness of India.

"You really can't hedge away the big risks but you can hedge some of the risks by going into some of the other Asia countries."

Anew Capital Management's Ms Sahai viewed possible risks as the lower financial accountancy standards currently in India compared to Europe, although she added that with time those standards would become more aligned. There were also regulatory risks with delays in new instruments being implemented, but here again India is making "slow and steady progress" she said.

Standard Chartered Bank's Mr. Moran said India was ahead of China in terms of having more robust and transparent economic regulations and has a buffer against the worst effects of any US recession because of more and more Asian wealth being reinvested in its economy, and those of its neighbours.