<PAGE>
MORGAN STANLEY
INDIA INVESTMENT FUND, INC.
- ---------------------------------------------
DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
Barton M. Biggs James W. Grisham
CHAIRMAN OF THE BOARD VICE PRESIDENT
OF DIRECTORS Michael F. Klein
Warren J. Olsen VICE PRESIDENT
PRESIDENT AND DIRECTOR Harold J. Schaaff, Jr.
John Chu VICE PRESIDENT
DIRECTOR Joseph P. Stadler
Gerard la Hausse de Louviere VICE PRESIDENT
DIRECTOR Valerie Y. Lewis
Gerard E. Jones SECRETARY
DIRECTOR James R. Rooney
John A. Levin TREASURER
DIRECTOR Belinda A. Brady
Fergus Reid ASSISTANT TREASURER
DIRECTOR
</TABLE>
- ---------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Asset Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------
CUSTODIANS
Morgan Stanley Trust Company
One Pierrepont Plaza
Brooklyn, New York 11201
The Chase Manhattan Bank
770 Broadway
New York, New York 10003
- --------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- --------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726.
------------------------
MORGAN STANLEY
INDIA INVESTMENT
FUND, INC.
---------------------
FIRST QUARTER REPORT
MARCH 31, 1997
MORGAN STANLEY ASSET MANAGEMENT INC.
INVESTMENT ADVISER
<PAGE>
LETTER TO SHAREHOLDERS
- --------
For the three months ended March 31, 1997, the total return of the Morgan
Stanley India Investment Fund, Inc. (the "Fund"), based on net asset value per
share, was 6.81% compared to 7.27% for the U.S. dollar adjusted Bombay Stock
Exchange (BSE) National Index (the "Index"). For the one year ended March 31,
1997, the Fund had a total return, based on net asset value per share, of -9.26%
compared to -10.18% for the Index. For the period since the Fund's inception on
February 25, 1994 through March 31, 1997, the Fund's total return, based on net
asset value per share, was -32.25% compared with -36.73% for the Index. On March
31, 1997, the closing price of the Fund's shares on the New York Stock Exchange
was $9.75, representing a 3.6% premium to the net asset value per share.
Two major events drove the Indian stock market through the first quarter of
1997.
The finance minister Mr. Chidambaram presented the union budget on February 28,
1997. The budget ushered in sweeping changes and tossed aside decades of
socialist cobwebs. The cornerstone of the budget was tax rationalization. It has
proposed large tax cuts for personal income, corporate income and dividends;
potentially leaving India with one of the lowest tax rates in the developing
world. The budget attempts to increase the tax revenues by betting that reduced
tax rates will lead to a more than proportional increase in the tax base. The
proposed tax cuts will cause a significant increase in household disposable
income and provide the economy with the much required demand impetus. Apart from
the tax cuts the budget proposes lowering import duties, an increase in the
limit of foreign investor ownership in Indian companies, an amnesty scheme for
surrendering "black" money, deregulation of health insurance, and curbs in
financing the government by the Central Bank. It is noteworthy that the
government achieved its revenue targets for 1996-1997 despite an economic
slowdown and contained the fiscal deficit at 5% of GDP. This year (1997-98) the
fiscal deficit is targeted at 4.5% of GDP. The fact that a coalition government
successfully presented one of the best budgets in the recent past clearly
indicates that there is political consensus on the reform and liberalization
process. Markets applauded the budget uproariously and the BSE Sensex surged by
544 points (15%) within 5 days to touch 4029 points.
Indian politics played truant once again with the Congress Party withdrawing
support to the United Front coalition government on March 30. As is typical with
markets, all the bad news got discounted in a single trading day with the market
tumbling 8% on March 31. On April 11, the government was finally voted out in
the Parliament. This pushes India into a fresh phase of political uncertainty
with no party having a clear majority. It is now up to the President to invite
one of the leading parties -- Bhartiya Janata Party, Congress Party or United
Front to form another coalition or dissolve the Parliament and call for new
elections. Markets are behaving with amazing equanimity and show no signs of
panic. This is largely because all political parties have committed to salvage
the recent budget proposals and approve it in an extraordinary sitting of the
Parliament on April 21.
As India makes the transition from a regulated to a free market economy,
competition in industry is rising sharply due to a variety of factors -- entry
of multinationals, large expansions by domestic players to achieve a globally
competitive scale of operation, and consolidation caused by rationalization of
marginal capacities through mergers and acquisitions. Though macro economic
indicators continue to promise healthy growth (6-8% GDP) we are increasingly
finding that the rewards of growth are being eroded by increased competition.
'Development' is playing its true role and transferring economic surpluses from
producers to consumers. Only companies with an acute competitive advantage and a
dominant market position can buck this trend. Each of the top 4 holdings of the
Fund Bharat Heavy Electricals ("BHEL"), Container Corporation of India
("CONCOR"), Housing Development Finance Corporation ("HDFC") and State Bank of
India ("SBI"), which account for 34% of the net assets of the Fund, satisfy
these criteria in a unique manner.
BHEL, which is a power equipment manufacturer, has installed 65% of the power
generating capacity in India and has won 85% of all orders awarded through an
international competitive bidding system. It is the lowest cost power equipment
manufacturer in the world and the pride of the Indian engineering industry.
CONCOR is a multi-modal container transporter and a natural monopoly due to a
strong infrastructure which will be difficult to duplicate. Any potential
competitor would face the daunting task of building a railway network across the
length and breadth of India. HDFC finances the purchase of homes and has a
market share of 52% in a seemingly commoditized product. The fact that HDFC
enjoys market leadership despite pricing its loans higher than it's competition
is a testimony to their superior customer service. SBI has a market share of 20%
in the banking industry on its own which together with its affiliates is placed
at 28%. Through its formidable distribution advantage State Bank of India
captures the lion's share of the cheapest pool of funds available in India,
namely, bank deposits.
The portfolio of the Fund is well anchored around the long term winners in the
Indian market and is expected to perform well.
Sincerely,
/s/ Warren J. Olsen
Warren J. Olsen
PRESIDENT AND DIRECTOR
/s/ Vinod Sethi
Vinod Sethi
PORTFOLIO MANAGER
April 1997
2
<PAGE>
Morgan Stanley India Investment Fund, Inc.
Investment Summary as of March 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL
INFORMATION
TOTAL RETURN (%)
----------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
------------------------ ------------------------ ------------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
<S> <C> <C> <C> <C> <C> <C>
------------------------ ------------------------ ------------------------
FISCAL YEAR TO DATE 2.63% -- 6.81% -- 7.27% --
ONE YEAR -12.36 -12.36% -9.26 -9.26% -10.18 -10.18%
SINCE INCEPTION* -29.80 -10.80 -32.25 -11.82 -36.73 -13.76
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
A BAR CHART REFLECTING THE DATA BELOW IS REFLECTED HERE.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31:
TOTAL RETURN
1994* 1995 1996 THREE MONTHS ENDED MARCH 31, 1997
----- ---- ---- -----------------------------------
<S> <C> <C> <C> <C>
Net Asset Value Per Share $13.99 $8.91 $8.81 $9.41
Market Value Per Share $11.25 $9.13 $9.50 $9.75
Premium/(Discount) -19.6% 2.5% 7.8% 3.6%
Income Dividends - - - -
Capital Gains Distributions $0.17 - - -
Fund Total Return (2) 0.72% -36.31% -1.12% 6.81%
Index Total Return (3) -7.88% -31.53% -6.49% 7.27%
Morgan Stanley India Investment Fund, Inc. (2)
Bombay Stock Exchange (BSE) National Index (3)
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) The Bombay Stock Exchange (BSE) National Index is a market capitalization
weighted index including the equity shares of 100 companies from the
"Specified" and the "Non-specified" list of the 5 major stock exchanges,
namely, Bombay, Calcutta, Delhi, Ahmedabad and Madras. Prior to fiscal year
1997, the Fund used the Bombay Stock Exchange Sensitive Index as its
benchmark for performance purposes. Beginning in 1997, the Fund is now using
the Bombay Stock Exchange National Index for the purpose of performance
comparisons. This index more closely represents the investment strategy of
the Fund.
* The Fund commenced operations on February 25, 1994.
3
<PAGE>
Morgan Stanley India Investment Fund, Inc.
Portfolio Summary as of March 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INVESTMENTS DIVERSIFICATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Fixed Income Securi-
ties 0.3%
Equity Securities 97.3%
Short-Term Invest-
ments 2.4%
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Automobiles 16.7%
Banking 5.8%
Chemicals 4.2%
Electronic Components & Instruments 3.6%
Energy Equipment & Services 18.7%
Financial Services 6.0%
Health & Personal Care 11.8%
Machinery & Engineering 4.7%
Telecommunications 4.8%
Transportation - Road and Rail 7.4%
Other 16.3%
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
---------------
<C> <S> <C>
1. Bharat Heavy Electricals Ltd. 16.7%
2. Container Corp. of India Ltd. 7.4
3. Housing Development Finance Corp., Ltd. 5.2
4. State Bank of India Ltd. 5.1
5. Mahanagar Telephone Nigam Ltd. 4.7
<CAPTION>
PERCENT OF
NET ASSETS
---------------
<C> <S> <C>
6. Sundaram Fasteners Ltd. 2.5%
7. Infosys Technology Ltd. 2.3
8. MRF Ltd. 2.1
9. Hoechst Schering Agrevo Ltd. 1.9
10. Tata Engineering & Locomotive Ltd. 1.7
---------------
49.6%
---------------
---------------
</TABLE>
4
<PAGE>
INVESTMENTS (UNAUDITED)
- ---------
MARCH 31, 1997
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
COMMON STOCKS (97.7%)
(Unless otherwise noted)
- ---------------------------------------------------------
- ------------
APPLIANCES & HOUSEHOLD DURABLES (1.1%)
Bharat Pipes & Fittings Ltd. 150 U.S.$ --@
Blow Plast Ltd. 454,200 731
Kelvinator Ltd. 25 --@
Phillips India Ltd. 692,150 1,525
Punjab Anand Lamp Industries Ltd. 227,000 95
Supreme Industries Ltd. 220,950 1,080
VIP Industries Ltd. 161,900 183
Whirlpool of India 13,350 12
--------------
3,626
--------------
- ---------------------------------------------------------
- ------------
AUTOMOBILES (16.7%)
Apollo Tyres Ltd. 510,975 1,536
Apollo Tyres Ltd. (Rights) 245 --@
Apollo Tyres Ltd. (Warrants) 141,771 101
Ashok Leyland Ltd. 370,580 871
Autolec Industries Ltd. 241,093 343
Autolite Ltd. 132,670 307
Bajaj Tempo Ltd. -- New 47,198 316
Bharat Earth Movers 431,000 1,563
Castrol (India) Ltd. 70,200 809
Ceat Tyres Ltd. 833,547 1,104
Denso India Ltd. 648,000 1,663
Elgi Tyres & Tread Ltd. 273,150 2,992
Engine Values Ltd. 174,700 1,072
Escorts Ltd. 150 --@
GKN Invel Transmissions Ltd. 100 --@
Harig Crankshafts Ltd. 189,400 24
Hero Honda Ltd. 310,850 2,599
Jay Bharat Maruti Ltd. 92,800 66
LML Ltd. 135,900 140
Lumax Automatic Parts Industries Ltd. 373,600 1,055
Modi Rubber Ltd. 300 1
Motherson Sumi Systems Ltd. 223,938 569
Motherson Sumi Systems Ltd. (Rights) 40 --@
MRF Ltd. 83,130 7,162
O.E.N. Connectors Ltd. 156,626 210
Pan Auto Ltd. 4,700 --@
Patheja Brothers Forging & Stamp Ltd. 450,000 794
Patheja Forgings and Auto Ltd. 325,000 191
Premier Instruments Ltd. 245,987 1,046
Punjab Tractors Ltd. 368,670 4,565
Rane Madras Ltd. 213,100 1,872
Rane Brakes & Lining Ltd. 7,500 49
Rico Auto Industries Ltd. 221,000 407
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
S.K.F. Bearings Ltd. 57,380 U.S.$ 4,241
Subros Auto Ltd. 159,395 542
Sundaram Brake Ltd. 27,550 123
Sundaram Brake Ltd. (Warrants) 2,850 12
Sundaram Fasteners Ltd. 481,100 8,252
Tata Engineering & Locomotive Ltd. 588,417 5,580
TVS Suzuki Ltd. 376,550 3,676
VST Tillers & Tractors Ltd. 173,000 207
--------------
56,060
--------------
- ---------------------------------------------------------
- ------------
BANKING (5.8%)
Federal Bank Ltd. -- New 138,950 330
HDFC Bank Ltd. 1,381,100 1,791
Oriental Bank of Commerce Ltd. 98,200 184
State Bank of India Ltd. 2,239,370 17,035
--------------
19,340
--------------
- ---------------------------------------------------------
- ------------
BEVERAGES & TOBACCO (0.2%)
ITC Ltd. 62,395 623
McDowell & Co., Ltd. 300 --@
--------------
623
--------------
- ---------------------------------------------------------
- ------------
BROADCASTING & PUBLISHING (1.5%)
Control Print (India) Ltd. 102,500 14
Cosmo Films Ltd. 209,900 164
Navneet Publications Ltd. 233,100 780
New Delhi Television Ltd. 333,300 753
Srishti Video Corp. Ltd. 225,000 47
Srishti Video Corp Ltd. -- New 225,000 41
Tata Donnelley Ltd. 195,500 1,964
Zee Telefilms Ltd. 543,800 1,335
--------------
5,098
--------------
- ---------------------------------------------------------
- ------------
BUILDING MATERIALS & COMPONENTS (1.5%)
Associated Cement Co., Ltd. 31,195 1,152
Bell Ceramics Ltd. 524,750 220
Dalmia Cement Ltd. 124,850 693
Gujarat Sidhee Cement Ltd. 2,500,000 349
Hindustan Sanitaryware and Industries
Ltd. 70,000 332
ITW Signode India Ltd. 574,950 1,531
Madras Cements Ltd. 10 2
Murudeshwar Ceramics Ltd. 346,300 415
Priyadarshini Cement Ltd. 172,150 74
Shree Cements Ltd. 224,050 119
--------------
4,887
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
CHEMICALS (4.2%)
Asian Paints Ltd. 87,880 U.S.$ 685
Atul Ltd. 49,521 40
Chemox Chemicals Ltd. -- New 142,900 54
Chemox Chemicals Ltd. 250,000 94
Colour Chem Ltd. 26,877 2,211
E.I.D. Parry Ltd. GDR 94,320 198
Gujarat Narmada Valley Fertilizers
Ltd. GDR 212,000 636
Hindustan Organic Chemicals Ltd. 554,400 424
Hoechst Schering Agrevo Ltd. 374,900 6,274
ICI India Ltd. 484,400 1,864
Indian Organic Chemical Ltd. 679,050 152
Indian Petro Chemical Corp., Ltd. 19,900 77
Indian Petro Chemical Corp., Ltd. GDR
144A 22,000 250
Indo Gulf Fertilizer & Chemical Ltd.
-- New 100 --@
ITC Agrotech Co., Ltd. 100 --@
ITC Agrotech Co., Ltd. (Rights) 95,800 --@
Jaysynth Dyechem Ltd. 340,500 237
Metrochem Industries Ltd. 148,700 152
MSL Industries Ltd. 208,300 180
MSL Industries Ltd. -- New 62,000 48
Reliance Industries Ltd. 25,120 180
Sudarshan Chemicals Ltd. 258,907 462
Tainwala Chemicals & Plastics Ltd. 52,109 9
--------------
14,227
--------------
- ---------------------------------------------------------
- ------------
CONSTRUCTION & HOUSING (0.2%)
Hindustan Construction Ltd. 350,000 293
Nagarjuna Construction Ltd. 156,100 201
Nagarjuna Construction Ltd. -- New 97,500 118
--------------
612
--------------
- ---------------------------------------------------------
- ------------
ELECTRICAL & ELECTRONICS (0.5%)
AKG Acoustics (India) Ltd. 2,000 1
Asian Electronics Ltd. 306,000 862
Bajaj Tempo Ltd. 37,300 242
Bajaj Tempo Ltd. (Rights) 851 3
BPL Ltd. 508,900 606
Centrum Electronics Ltd. 273,300 31
--------------
1,745
--------------
- ---------------------------------------------------------
- ------------
ELECTRONIC COMPONENTS & INSTRUMENTS (3.6%)
Datar Switchgear Ltd. 275,900 U.S.$ 423
Fujitsu ICIM Ltd. 655,215 224
Infosys Technology Ltd. 279,800 7,856
Mastek Ltd. 171,400 608
Modi Xerox Ltd. 778,550 2,497
Rolta India Ltd. 5,000 2
Samtel Colour Ltd. 756,950 227
S&S Industries & Enterprises Ltd.
(Rights) 180 --@
S&S Power Switchgear Ltd. 226,055 429
VHEL Industries Ltd. 175 --@
--------------
12,266
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
ENERGY EQUIPMENT & SERVICES (18.7%)
Bharat Heavy Electricals Ltd. 6,802,000 U.S.$ 56,050
Crompton Greaves Ltd. 950,330 2,372
Jyoti Structure Ltd. 157,750 726
KEC International Ltd. 536,857 936
Kirloskar Oil Engine Ltd. 380,440 931
Modern Malleables Ltd. -- New 420,000 86
Shiram Honda Power Equipment Ltd. 353,665 1,637
Uniflex Cables Ltd. 287,400 180
--------------
62,918
--------------
- ---------------------------------------------------------
- ------------
ENERGY SOURCES (0.1%)
Renewable Energy 200,000 279
--------------
- ---------------------------------------------------------
- ------------
FINANCIAL SERVICES (6.0%)
Canfin Homes Ltd. 1,011,050 430
Housing Development Finance Corp.,
Ltd. 229,642 17,613
ICICI Ltd. -- New 11,386 18
Industrial Finance Corp. (India) Ltd. 1,192,800 848
SCICI Ltd. 1,000 1
Sundaram Finance Ltd. 83,950 721
UTI Master Gain 1,006,100 272
UTI MasterShares 326,640 114
--------------
20,017
--------------
- ---------------------------------------------------------
- ------------
FOOD & HOUSEHOLD PRODUCTS (0.4%)
American Dry Fruits Ltd. 538,500 101
Aruna Sugars & Enterprises Ltd. 350 --@
Brooke Bond Lipton Ltd. 650 7
Dhampur Sugar Mills Ltd. 100,000 142
Sakthi Sugar Ltd. 151,615 70
Thiru Arooran Sugars Ltd. 264,500 487
Thiru Arooran Sugars Ltd. -- New 204,813 363
Umred Agro Complex Ltd. 124,500 3
Vadilal Industries Ltd. 250,000 44
Western Hatcheries Ltd. 237,933 179
--------------
1,396
--------------
- ---------------------------------------------------------
- ------------
FOREST PRODUCTS & PAPER (0.8%)
Ballarpur Industries Ltd. 603,042 866
ITC Bhadrachalam Paperboards Ltd. --
New 200,000 259
Paper Products Ltd. -- New 218,900 806
Pudumjee Ltd. 221,600 286
Tamilnadu Newsprint and Paper Ltd. 385,000 524
--------------
2,741
--------------
- ---------------------------------------------------------
- ------------
HEALTH & PERSONAL CARE (11.8%)
Cheminor Drugs Ltd. 243,650 645
Cipla Ltd. 295,050 4,793
Clariant (India) Ltd. 67,600 314
Crossland Research Labs Ltd. 371,000 2,690
E. Merck (India) Ltd. 406,275 1,972
Godrej Soaps Ltd. -- New 586,550 497
Hindustan Ciba-Geigy Ltd. 17,630 1,548
Hoechst Marion Roussel India Ltd. 585,200 5,239
- ---------------------------------------------------------
- ------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
HEALTH & PERSONAL CARE (CONTINUED)
Indian Shaving Products Ltd. 195,764 U.S.$ 2,184
Lakme Ltd. 541,449 3,492
Marico Industries Ltd. 283,200 1,896
Nicholas Piramal India Ltd. 635,240 2,675
Pfizer Ltd. 404,560 2,618
Ranbaxy Labs Ltd. -- New 40,000 711
Rhone Poulenc (India) Ltd. 68,250 1,154
Sandoz (India) Ltd. 67,600 311
Searle (India) Ltd. 300,000 577
Smithkline Beecham Pharmaceutical Ltd. 344,650 2,324
Sun Pharmaceutical Industries Ltd. 443,900 3,219
TTK Biomed Ltd. 143,700 100
Unichem Labs Ltd. 162,700 573
--------------
39,532
--------------
- ---------------------------------------------------------
- ------------
INDUSTRIAL COMPONENTS (1.1%)
BOC India Ltd. 323,500 419
Carborondum Universal Ltd. 493,300 1,692
Chicago Pneumatic India Ltd. 324,990 1,650
--------------
3,761
--------------
- ---------------------------------------------------------
- ------------
LEISURE & TOURISM (0.3%)
ITC Hotels Ltd. 252,100 963
Indian Hotels Co., Ltd. 50 1
Kamat Hotels India Ltd. 300,000 167
--------------
1,131
--------------
- ---------------------------------------------------------
- ------------
MACHINERY & ENGINEERING (4.7%)
Advani-Oerlikon Ltd. 450,177 480
Ahmednagar Forgings Ltd. 166,100 220
Artson Engineering Ltd. 204,293 83
Esab India Ltd. 564,050 1,373
Graphite India Ltd. 272,500 311
Indian Seamless Metal Tubes Ltd. 284,980 302
Indian Seamless Metal Tubes Ltd. --
New 139,500 132
Ingersoll Rand (India) Ltd. 6,650 52
Kabra Extrusion Technik Ltd. 152,600 179
Kirloskar Cummins Ltd. 165,800 1,826
Lakshmi Machine Works Ltd. 7,640 1,065
Lakshmi Synthetic Machinery Ltd. 152,400 201
M.M. Forgings Ltd. 35,800 45
Praj Industries Ltd. 221,600 433
Revathi-CP Equipment Ltd. 138,400 1,766
Siemens Ltd. 45,250 372
Thermax Ltd. 461,100 3,845
Wartsila Diesel Ltd. 391,500 3,262
--------------
15,947
--------------
- ---------------------------------------------------------
- ------------
METALS -- NON-FERROUS (0.1%)
Pennar Aluminum Co., Ltd. 1,632,800 273
--------------
- ---------------------------------------------------------
- ------------
METALS -- STEEL (0.3%)
India Seamless Steel & Alloy Ltd. 905,800 82
Isibars Ltd. 500,000 495
Mukand Iron & Steel Works Ltd. 1,450 2
Panchmahal Steels Ltd. 197,700 133
Sesa Goa Ltd. 1,955 12
- ---------------------------------------------------------
- ------------
<CAPTION>
VALUE
SHARES (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
Sesa Goa Ltd. (Rights) 10 U.S.$ --@
Shri Ishar Alloy Steels Ltd. 369,500 62
Tata Iron & Steel Co., Ltd. 648 3
Tata SSL Ltd. 62,550 65
Tata SSL Ltd. -- New 13,800 13
Uttam Galva Steels Ltd. 436,250 125
--------------
992
--------------
- ---------------------------------------------------------
- ------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.8%)
Alpha Geo Ltd. 68,700 9
Essel Packaging Ltd. 368,100 975
Flex Industries Ltd. 60 --@
Flex Industries Ltd. (Rights) 9,342 --@
Flex Industries Ltd. (Warrants) 62,039 74
Garware Plastics & Polyester Ltd. 397,789 855
Pearl Polymers Ltd. 264,100 90
Sharp Industries Ltd. 100 --@
Su-Raj Diamonds Ltd. 100 --@
Titan Industries Ltd. 348,600 591
Uniworth International Ltd. 100 --@
Vippy Industries Ltd. 250,000 19
--------------
2,613
--------------
- ---------------------------------------------------------
- ------------
MULTI-INDUSTRY (0.7%)
Birla VXL Ltd. 712,680 318
Indian Rayon & Industries Ltd. 50 --@
Indian Rayon & Industries Ltd. GDR 8,900 86
Indian Rayon & Industries Ltd. GDR
144A 50,000 486
JK Corp. Ltd. 357,483 409
Larsen & Toubro Ltd. 1,395 8
Ramco Ltd. 42,800 1,074
S&S Industries & Enterprises Ltd. 231,040 52
Standard Industries Ltd. 107,016 19
Widia (India) Ltd. 500 43
--------------
2,495
--------------
- ---------------------------------------------------------
- ------------
RECREATION, OTHER CONSUMER GOODS (0.8%)
Tube Investments of India Ltd. 283,316 405
Tube Investments of India Ltd. GDR 198,133 322
Vashishti Detergents Ltd. 1,957,567 2,116
--------------
2,843
--------------
- ---------------------------------------------------------
- ------------
TELECOMMUNICATIONS (4.8%)
Indian Telephone Industries Ltd. 932,700 182
Mahanagar Telephone Nigam Ltd. 2,327,700 15,646
Punjab Wire Ltd. 61,800 123
--------------
15,951
--------------
- ---------------------------------------------------------
- ------------
TEXTILES & APPAREL (3.2%)
A.P. Rayon Ltd. 231,575 179
Arun Processors Ltd. 176,000 11
Bata India Ltd. 184,750 340
Bata India Ltd. -- New 197,952 365
Century Textiles & Industries Ltd. GDR 6,500 435
Coates of India Ltd. (Rights) 65,680 --@
Coates of India Ltd. 238,150 990
Coates Viyella Ltd. 131,300 195
- ---------------------------------------------------------
- ------------
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------
- ------------
<S> <C> <C>
TEXTILES & APPAREL (CONTINUED)
Cosmos Leather Exports Ltd. 325,000 U.S.$ 16
DCL Polyesters Ltd. 899,600 165
Delta Industries Ltd. 380,000 172
G.T.N. Textiles Ltd. 257,500 357
Indo Rama Synthetics Ltd. 1,985,661 1,091
Indo Rama Synthetics Ltd. -- New 309,684 151
J.K. Synthetics Ltd. 2,091,958 473
Mahavir Spinning Mills Ltd. 491,000 986
Maral Overseas Ltd. 650,600 426
Modi Tele Fibres Ltd. 800 --@
Precot Mills Ltd. -- New 66,777 179
Raymond Ltd. 31,250 68
Raymond Ltd. Bonus 219,991 445
Raymond Ltd. GDR 10,000 46
Raymond Ltd. GDR 144A 177,000 819
Raymond Ltd. GDR -- New 12,500 58
Raymond Ltd. -- New 52,500 106
Raymond Ltd. -- New 144A 88,500 409
SIV Industries Ltd. GDR 313,500 235
SRF Ltd. 665,119 482
Sanotgen Exports Ltd. 272,800 25
Shree Rajasthan Syntex Ltd. 266,550 126
Super Spinning Mills Ltd. 200,357 500
Vardhaman Polytex Ltd. 282,600 229
Vardhaman Spinning & General Mills
Ltd. 373,500 677
Viral Syntex Ltd. 209,200 67
Woolworth India Ltd. 1,100 1
--------------
10,824
--------------
- ---------------------------------------------------------
- ------------
TRANSPORTATION -- ROAD & RAIL (7.4%)
Container Corp. of India Ltd. 2,061,600 24,724
--------------
- ---------------------------------------------------------
- ------------
TRANSPORTATION -- SHIPPING (0.4%)
Great Eastern Shipping Ltd. 1,204,500 1,201
Great Eastern Shipping Ltd. GDR 20,000 133
Mercator Lines Ltd. 3,000 1
--------------
1,335
--------------
- ---------------------------------------------------------
- ------------
UTILITIES -- ELECTRICAL & GAS (0.0%)
Andhra Valley Power Supply Co., Ltd. 200 1
Tata Hydro Electric Power Supply Co.,
Ltd. 450 1
--------------
2
--------------
- ---------------------------------------------------------
- ------------
TOTAL COMMON STOCKS
(Cost U.S. $411,352) 328,258
--------------
- ---------------------------------------------------------
- ------------
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<S> <C> <C>
- ---------------------------------------------------------
- ------------
FIXED INCOME SECURITIES (0.3%)
- ---------------------------------------------------------
- ------------
CONSTRUCTION & HOUSING (0.1%)
Nagarjuna Construction Co. 14.00%,
6/1/97 INR 98 U.S.$ 120
--------------
- ---------------------------------------------------------
- ------------
METALS -- STEEL (0.0%)
MSL Industries Ltd. 16.00%, 7/31/00 62 48
Tata SSL Ltd. 14.00%, 12/6/02 14 14
--------------
62
--------------
- ---------------------------------------------------------
- ------------
MISCELLANEOUS MATERIALS & COMMODITIES (0.2%)
Garware Plastics & Polyester Ltd.
16.00%, 5/1/05 277 686
--------------
- ---------------------------------------------------------
- ------------
TOTAL FIXED INCOME SECURITIES
(Cost U.S. $1,289) 868
--------------
- ---------------------------------------------------------
- ------------
SHORT-TERM INVESTMENT (0.2%)
REPURCHASE AGREEMENT (0.2%)
Chase Securities, Inc. 6.00%, dated
3/31/97, due 4/1/97 to be repurchased
at U.S. $765, collateralized United
States Treasury Bonds, 11.25%, due
2/15/15, valued at U.S. $795 (Cost
U.S. $765) U.S.$ 765 765
--------------
- ---------------------------------------------------------
- ------------
FOREIGN CURRENCY ON DEPOSIT
WITH CUSTODIAN (2.2%)
Indian Rupee (Cost U.S. $7,496) INR 268,933 7,501
--------------
- ---------------------------------------------------------
- ------------
TOTAL INVESTMENTS (100.4%)
(Cost U.S. $420,902) 337,392
--------------
- ---------------------------------------------------------
- ------------
OTHER ASSETS AND LIABILITIES (-0.4%)
Other Assets U.S.$ 4,994
Liabilities (6,307) (1,313)
--------------- --------------
- ---------------------------------------------------------
- ------------
NET ASSETS (100%)
Applicable to 35,707,092 issued and outstanding U.S.
$0.01 par value shares (100,000,000 shares
authorized) U.S.$ 336,079
--------------
--------------
- ---------------------------------------------------------
- ------------
NET ASSET VALUE PER SHARE U.S.$ 9.41
--------------
--------------
- ---------------------------------------------------------
- ------------
</TABLE>
@ -- Value is less than U.S. $500.
GDR -- Global Depositary Receipt.
8
