<PAGE>
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MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT
FUND, INC.
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THIRD QUARTER REPORT
SEPTEMBER 30, 1999
MORGAN STANLEY DEAN WITTER INVESTMENT
MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT FUND, INC.
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DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Michael F. Klein
PRESIDENT AND DIRECTOR
John S.Y. Chu
DIRECTOR
Gerard E. Jones
DIRECTOR
Gerard Lahausse de la Louviere
DIRECTOR
John A. Levin
DIRECTOR
Fergus Reid
DIRECTOR
Samuel T. Reeves
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Harold J. Schaaff, Jr.
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
TREASURER
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INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
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ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
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CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
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SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
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LEGAL COUNSEL
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
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INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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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 or visit our website at
www.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
- ---------
For the nine months ended September 30, 1999, the Morgan Stanley Dean Witter
India Investment Fund, Inc. (the "Fund") had a total return, based on net asset
value per share, of 97.82% compared to 58.64% for the U.S. dollar adjusted
Bombay Stock Exchange (BSE) National Index (the "Index"). For the period since
the Fund's inception on February 25, 1994 through September 30, 1999, the Fund's
total return, based on net asset value per share, was 30.89% compared to -21.30%
for the Index. On September 30, 1999, the closing price of the Fund's shares on
the New York Stock Exchange was $13 1/4 representing a 27.1% discount to the
Fund's net asset value per share.
Across the global investing community, it is a widely known fact that during
bull markets realizing absolute returns is comparatively easier than
outperforming market benchmarks, particularly at the incipient stages of a bull
phase usually characterized by robust sector rotation. An interesting fact is
that over the past decade when the U.S. market has been in the midst of the most
powerful bull phases in history, less than 10% of all funds investing in U.S.
equities have outperformed the S&P 500 Index. Currently in India, the most
protracted bear market in the market's history extending to four years seems to
have given way to a new bull market this year. Absolute returns have been
stellar and in Asia, year-to-date, India is currently the best performing
market.
We are encouraged that not only have our investors participated in this bull
market, but we have further enhanced value to the return profile by considerably
outperforming the benchmarks. It has always been our endeavor to ensure
consistency in performance through a distinct bottom-up approach to investing.
Long alternating bull and bear market cycles in India, where we are one of the
earliest foreign institutional investors, have taught us the importance of
maintaining a certain discipline that in turn will bring about consistent
outperformance.
Our investing approach entails that we restrict our universe of stocks in the
Fund to companies with: a) high- quality, proactive management that is high on
integrity, b) a rising, if not high return on equity portfolio, and c) a
dominant share in businesses that do not require dilution of capital.
Our effort is to visit every company prior to investing in its stock and our
reliance is more on qualitative inputs and basic corporate strategy than
quantitative financials. There is no bias towards a particular investing style
and stock selection over the years has reflected an open mind towards buying
both growth and value styles.
Performance has been the primary driver of our investing style and so over the
years we have, at times, bought companies trading at more than 50 times
prospective earnings. Similarly, our recent stock purchases have been of
companies trading at five times historical earnings, but that meet our basic
criteria of stock selection as listed above. Overlaid on this essentially
bottom-up approach to investing is a consideration for market psychology,
macro-economic variables and international trends, all of which are closely
tracked.
Given the way the Fund is positioned, we think it should continue to more than
capture the market's improving performance for our investors. Regarding the
market's performance, our conviction has been strengthened by Andhra Pradesh
Chief Minister's victory in the recently concluded elections as his electoral
success has lent credibility to the growing worldwide belief that good economics
now makes for smart politics and India should follow the same path. We expect a
continuation of the absolute and relative performance run that should help this
Fund continue to perform positively.
On August 10, 1998, the Fund commenced a share repurchase program for purposes
of enhancing shareholder value and reducing the discount at which the Fund's
shares traded from their net asset value. For the nine months ended September
30, 1999, the Fund repurchased 1,636,300 shares of its Common Stock at an
average price per share of $8.42 and an average discount of 26.21% from net
asset value per share. The Fund expects to continue to repurchase its
outstanding shares at such time and in such amounts as it believes will further
the accomplishment of the foregoing objectives, subject to review by the Board.
Sincerely,
/s/ Michael F. Klein
Michael F. Klein
PRESIDENT AND DIRECTOR
October 1999
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
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DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR
THE FUND, ARE AVAILABLE ON OUR WEBSITE AT
WWW.MSDW.COM/INSTITUTIONAL/INVESTMENTMANAGEMENT.
2
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Investment Summary as of September 30, 1999 (Unaudited)
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<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 96.30% -- 97.82% -- 58.64% --
One Year 98.13 98.13% 94.86 94.86% 56.11 56.11%
Five Year -3.93 - 0.80 23.36 4.29 -21.90 - 4.82
Since Inception* -4.61 - 0.84 30.89 4.93 -21.30 - 4.19
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- -------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
NINE MONTHS
ENDED
SEPTEMBER 30,
1994* 1995 1996 1997 1998 1999
------ ------- ------- ------ ------ -------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share.... $13.99 $8.91 $8.81 $8.83 $9.19 $18.18
Market Value Per Share....... $11.25 $9.13 $9.50 $8.38 $6.75 $13.25
Premium/(Discount)........... -19.6% 2.5% 7.8% -5.1% -26.6% -27.1%
Capital Gains Distributions.. $ 0.17 -- -- -- -- --
Fund Total Return (2)........ 0.72% -36.31% -1.12% 0.23% 4.08% 97.82%
Index Total Return (3)....... -7.88% -31.53% -6.49% 6.43% -20.98% 58.64%
</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.
* The Fund commenced operations on February 25, 1994.
3
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Portfolio Summary as of September 30, 1999 (Unaudited)
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DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (98.6%)
Short-Term Investments (1.4%)
</TABLE>
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INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Automobiles (20.3%)
Data Processing & Reproduction (15.8%)
Health & Personal Care (12.5%)
Broadcasting & Publishing (11.0%)
Electrical & Electronics (6.9%)
Beverages & Tobacco (6.2%)
Chemicals (5.5%)
Machinery & Engineering (3.3%)
Transportation - Road & Rail (2.9%)
Financial Services (1.6%)
Other (14.0%)
</TABLE>
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TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
------------
<S> <C>
1. Infosys Technology Ltd. 13.6%
2. Zee Telefilms Ltd. 10.9
3. Hero Honda Motors Ltd. 8.4
4. Bharat Heavy Electricals Ltd. 6.8
5. Tata Engineering & Locomotive Ltd. 5.1
6. Tata Tea Ltd. 3.8
7. Cipla Ltd. 3.4
8. Container Corp. of India Ltd. 2.9
9. ITC Ltd. 2.4
10. Punjab Tractors Ltd. 2.3
----
59.6%
----
----
</TABLE>
4
<PAGE>
FINANCIAL STATEMENTS
- ---------
STATEMENT OF NET ASSETS (UNAUDITED)
- ---------
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
VALUE
SHARES (000)
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<S> <C> <C>
COMMON STOCKS (96.4%)
(Unless otherwise noted)
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APPLIANCES & HOUSEHOLD DURABLES (0.4%)
Phillips India Ltd. 799,550 U.S .$ 2,315
-------------------
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AUTOMOBILES (20.3%)
Elgi Tyres & Tread Ltd. 410,100 3,765
Escorts Ltd. 173,736 913
Hero Honda Motors Ltd. 1,708,981 49,809
Motherson Sumi Systems Ltd. 2,350 6
Motor Industries Co., Ltd. 39,942 4,986
Patheja Bros Forgings & Stamp Ltd. 450,000 --@
Punjab Tractors Ltd. 550,670 13,900
Rane Brakes & Lining Ltd. 7,200 22
Rane Madras Ltd. 213,100 505
Sundaram Fasteners Ltd. 394,550 6,157
Tata Engineering & Locomotive Ltd. 4,923,773 30,509
TVS Suzuki Ltd. 614,622 9,853
-------------------
120,425
-------------------
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BANKING (1.5%)
HDFC Bank Ltd. 1,558,700 3,611
State Bank of India Ltd. 888,857 4,447
State Bank of India Ltd. GDR 134,650 673
-------------------
8,731
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BEVERAGES & TOBACCO (6.2%)
ITC Ltd. 740,057 13,961
Tata Tea Ltd. 1,629,849 22,623
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36,584
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BROADCASTING & PUBLISHING (11.0%)
New Delhi Television Ltd. 333,300 1,033
Zee Telefilms Ltd. 627,700 64,405
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65,438
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BUILDING MATERIALS & COMPONENTS (1.0%)
Supreme Industries Ltd. 832,900 5,925
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CHEMICALS (5.5%)
Agrevo India Ltd. 737,260 11,759
Castrol (India) Ltd. 2,300 20
Coates of India Ltd. 178,150 709
Colour-Chem Ltd. 64,602 4,447
Dr. Reddy's Laboratories Ltd. 236,451 7,993
ICI India Ltd. 402,078 1,871
Indo Gulf Corp., Ltd. 475,730 765
Monsanto Chemicals of India 99,800 4,466
Reliance Industries Ltd. 700 4
Sudarshan Chemicals Ltd. 234,552 455
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32,489
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DATA PROCESSING & REPRODUCTION (15.8%)
Fujitsu ICIM Ltd. 584,865 U.S.$ 7,709
Infosys Technology Ltd. 491,890 80,588
Modi Xerox Ltd. 1,077,400 3,288
NIIT Ltd. 150 10
Tata Infotech Ltd. 115,575 1,863
-------------------
93,458
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ELECTRICAL & ELECTRONICS (6.9%)
Bharat Heavy Electricals Ltd. 6,444,926 40,378
Carrier Aircon Ltd. 117,000 454
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40,832
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ENERGY EQUIPMENT & SERVICES (0.2%)
Renewable Energy Ltd. 47,800 1
Shriram Honda Power Equipment Ltd. 318,330 1,461
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1,462
-------------------
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FINANCIAL SERVICES (1.6%)
Housing Development Finance
Corp., Ltd. 1,398,270 9,210
ICICI Ltd. - New 50 --@
Sundaram Finance Ltd. 144,800 522
UTI Mastergain 46,500 14
UTI-MasterShares Ltd. 5,500 1
-------------------
9,747
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FOOD & HOUSEHOLD PRODUCTS (1.4%)
Smithkline Beecham Consumer
Health Care Ltd. 299,041 4,723
Strides Arcolab Ltd. 540,000 3,718
-------------------
8,441
-------------------
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FOREST PRODUCTS & PAPER (0.0%)
Ballarpur Industries Ltd. 100 --@
-------------------
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HEALTH & PERSONAL CARE (12.5%)
Bausch & Lomb India Ltd. 101,710 311
Cipla Ltd. 222,445 20,159
Dabur India Ltd. 287,520 7,644
E. Merck (India) Ltd. 351,125 5,805
Glaxo India Ltd. 125,000 2,223
Hoechst Marion Roussel India Ltd. 475,450 7,548
Marico Industries Ltd. 283,200 2,795
Novartis India Ltd. 541,600 13,261
Pfizer Ltd. 100 2
Smithkline Beecham Pharmaceuticals
(India) Ltd. 342,390 3,208
Sun Pharmaceutical Industries Ltd. 400,700 10,851
-------------------
73,807
-------------------
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</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- ---------------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL COMPONENTS (1.6%)
Apollo Tyres Ltd. 2,475 U.S.$ 13
ITW Signode India Ltd. 1,077,500 2,304
MRF Ltd. 109,280 5,706
S.K.F. Bearings Ltd. 55,256 1,414
-------------------
9,437
-------------------
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LEISURE & TOURISM (0.8%)
EIH Ltd. 260,400 1,381
Indian Hotels Co., Ltd. 323,522 3,155
-------------------
4,536
-------------------
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MACHINERY & ENGINEERING (3.3%)
Chicago Pneumatic India Ltd. 324,940 934
Cummins India Ltd. 398,440 4,856
Esab India Ltd. 564,850 1,108
Lakshmi Machine Works Ltd. 19,268 679
Lakshmi Synthetic Machinery Ltd. 137,700 33
Larsen & Toubro Ltd. 924,000 7,761
Rane Madras Ltd. 195,700 400
Revathi-CP Equipment Ltd. 298,600 2,981
Thermax Ltd. 179,687 928
-------------------
19,680
-------------------
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METALS STEEL (0.0%)
Tata Iron & Steel Co., Ltd. 150 --@
-------------------
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MISC. MATERIALS & COMMODITIES (1.3%)
Delta International 570,000 --@
Essel Packaging Ltd. 368,075 5,372
Tata Donnelley Ltd. 293,250 2,362
-------------------
7,734
-------------------
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RECREATION, OTHER CONSUMER GOODS (0.5%)
Titan Industries Ltd. 1,388,275 3,186
VIP Industries Ltd. 300 --@
-------------------
3,186
-------------------
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TELECOMMUNICATIONS INTEGRATED (0.3%)
Mahanagar Telephone Nigam Ltd. 423,386 1,771
-------------------
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TEXTILES & APPAREL (0.9%)
Bata India Ltd. 986,061 3,655
J.K. Synthetics Ltd. 622 --@
Madura Coats Ltd. 379,550 340
Mahavir Spinning Mills Ltd. 10,000 13
Rajapalayam Mills 17,100 696
Vardhaman Spinning & General
Mills Ltd. 332,450 473
-------------------
5,177
-------------------
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TRANSPORTATION ROAD & RAIL (2.9%)
Container Corp. of India Ltd. 2,438,972 17,351
-------------------
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UTILITIES ELECTRICAL & GAS (0.5%)
Jyoti Structures Ltd. 167,750 U.S.$ 239
Tata Power Co., Ltd. 1,379,504 2,501
-------------------
2,740
-------------------
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TOTAL COMMON STOCKS
(Cost U.S.$314,428) 571, 266
-------------------
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<CAPTION>
NO. OF
RIGHTS
- ---------------------------------------------------------------------------
<S> <C> <C>
RIGHTS (0.0%)
- ---------------------------------------------------------------------------
Building Materials & Components
Associated Cement Co., Ltd.
expiring 08/04/99
(Cost U.S. $--@) 10 --@
-------------------
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<CAPTION>
FACE
AMOUNT
(000)
- ---------------------------------------------------------------------------
<S> <C> <C>
FIXED INCOME SECURITIES (0.0%)
- ---------------------------------------------------------------------------
TEXTILES & APPAREL (0.0%)
Garware Plastics &
Polyester Ltd. 16.00% 5/1/05
(Cost U.S.$390) INR 277 197
-------------------
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SHORT-TERM INVESTMENTS (0.5%)
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REPURCHASE AGREEMENT (0.5%)
Chase Securities, Inc.,
5.05%, dated 9/30/99, due 10/1/99, to be repurchased at U.S.$3,120
collateralized by U.S.$2,920 United States Treasury Bonds, 7.125%, due
2/15/23, valued at U.S.$3,199
(Cost U.S.$3,120) U.S.$ 3,120 3,120
-------------------
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FOREIGN CURRENCY ON DEPOSIT
WITH CUSTODIAN (0.8%)
Indian Rupee
(Cost U.S.$4,804) INR 209,022 4,797
-------------------
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TOTAL INVESTMENTS (97.7%)
(Cost U.S.$322,742) 579, 380
-------------------
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6
<PAGE>
<CAPTION>
VALUE
(000)
- ---------------------------------------------------------------------------
<S> <C> <C>
OTHER ASSETS AND LIABILITIES (2.3%)
Other Assets U.S.$ 30,244
Liabilities (17,020) U.S.$ 13,224
-------------------
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NET ASSETS (100%)
Applicable to 32,600,492 issued and
outstanding U.S.$0.01 par value
shares (100,000,000
shares authorized) U.S.$ 592,604
-------------------
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NET ASSET VALUE PER SHARE U.S.$ 18.18
-------------------
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</TABLE>
@ - Value is less than U.S.$500.
GDR - Global Depositary Receipt
7
