<PAGE>
-----------------------------------------------------------
MORGAN STANLEY
DEAN WITTER
INDIA INVESTMENT
FUND, INC.
-----------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT FUND, INC.
================================================================================
DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD OF DIRECTORS
Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR
John D. Barrett II
DIRECTOR
John S.Y. Chu
DIRECTOR
Gerard E. Jones
DIRECTOR
Graham E. Jones
DIRECTOR
R.M.J. Gerard La Hausse
de la Louviere
DIRECTOR
John A. Levin
DIRECTOR
Andrew McNally IV
DIRECTOR
William G. Morton, Jr.
DIRECTOR
Samuel T. Reeves
DIRECTOR
Fergus Reid
DIRECTOR
Frederick O. Robertshaw
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Arthur J. Lev
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
TREASURER
Robin L. Conkey
ASSISTANT TREASURER
================================================================================
INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
--------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
--------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
--------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
--------------------------------------------------------------------------------
LEGAL COUNSEL
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
--------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
================================================================================
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/im.
<PAGE>
LETTER TO SHAREHOLDERS
---------
For the six months ended June 30, 2000, the Morgan Stanley Dean Witter India
Investment Fund, Inc. (the "Fund") had a total return, based on net asset value
per share, of -20.14% compared to -10.93% for the U.S. dollar adjusted Bombay
Stock Exchange (BSE) National Index (the "Index"). For the period from the
Fund's commencement of operations on February 25, 1994 through June 30, 2000,
the Fund's total return, based on net asset value per share, was 29.88% compared
to -16.74% for the Index. On June 30, 2000, the closing price of the Fund's
shares on the New York Stock Exchange was $12.00, representing a 33.5% discount
to the Fund's net asset value per share.
The first half of 2000 was one of the most volatile phases ever for global
financial markets and the Indian market, otherwise historically viewed as a
defensive play, was very much a part of this volatile price action. In fact, a
significant development over the past couple of years has been the way India has
increasingly begun to march to the global beat. Of course, correlation between
markets worldwide, with the U.S. market at the epicenter, has been rising in
general but India's integration has been particularly swift.
We view this as a positive development for the Indian market with the average
investor on a very sharp learning curve here as global events come to matter
more. The increased sophistication of the market has been accompanied by a sharp
rise in overall participation with daily trading volumes topping two billion
dollars, representing a more than fourfold increase over the past two years.
In line with global trends, the market has behaved in a schizophrenic manner.
The TMT (technology, media and telecom) sector being on one side with the rest
of the market grouped on the other. There was a sizable divergence in the
performance of these two broad categories before a violent move towards
convergence in the second quarter of the year. It would seem that sector
allocation was the most important part in managing a portfolio in recent times.
However, we think that markets have reached a stage where it is extremely
difficult to take a decisive stand in favor of either the TMT or non-TMT stocks
as a group. While growth rates of companies in the TMT sector are clearly
running on a different trajectory, prices (i.e. valuations) have come to reflect
those rates of growth. The non-TMT stocks are instead trading at apparently
inexpensive levels but investors do not seem to care much anymore about
conventional growth rates.
Accordingly, our strategy has been to adopt a sector-neutral position, where
sector allocation closely tracks the benchmark indices. However, the search
process for identifying the relative individual stock outperformers within that
framework remains intense. In such a turbulent phase, where the directional
movements have been whipsawing, we think stock selection matters most. The
portfolio changes over the past few months reflect our sharper focus on
management quality.
More specifically, on the technology front, one of the themes worth focusing on
is whether India's technology boom will gain more momentum domestically. So far,
India's technology boom has been largely outward-oriented in nature with some
world-class information technology companies catering primarily to global
technology demand. With low levels of fixed-line, computer and internet
penetration, the domestic technology story has been less impressive. The poor
state of local telecommunication infrastructure has been one of the main drags.
However, there are signs that the government is working on deregulating the
sector and if any such proposals do materialize then the domestic growth rates
in the sector could rise sharply, throwing up opportunities for private-sector
companies operating in that space.
Meanwhile, the news regarding the economy continues to steadily improve. India
seems set to achieve a growth rate of 7% this year and inflation is settling
down in the 6-7% range. Privatization will be the area in which government
policy will be most relevant but currently it is far from clear if the political
process will allow significant progress.
In the coming few months, we hope to see markets stabilize and consolidate
before launching the next assault. We will endeavor to search for some new
themes that could affect the marketplace in the next phase. We are still
uncertain as to whether the new phase will again involve a run-up in the TMT
sector, on the back of the high underlying growth rates in the sector, or shift
to being a more domestic-oriented theme. The most encouraging part about the
Indian market is that it is very wide and caters to every kind of profile with a
broad representation of TMT stocks, leading multinational companies and the
gargantuan public sector enterprises.
Sincerely,
/s/ Harold J. Schaaff, Jr.
Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR
July 2000
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.
FOREIGN INVESTING INVOLVES CERTAIN RISKS, INCLUDING CURRENCY FLUCTUATIONS AND
CONTROLS, RESTRICTIONS ON FOREIGN INVESTMENTS, LESS GOVERNMENTAL SUPERVISION AND
REGULATION, LESS LIQUIDITY AND THE POTENTIAL FOR MARKET VOLATILITY AND POLITICAL
INSTABILITY.
--------------------------------------------------------------------------------
DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR
THE FUND, ARE AVAILABLE ON OUR WEBSITE AT www.msdw.com/im.
2
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Investment Summary as of June 30, 2000 (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>
YEAR TO DATE -27.27% -- -20.14% -- -10.93% --
ONE YEAR 23.87 23.87% 40.50 40.50% 30.11 30.11%
FIVE YEAR 17.07 3.20 64.00 10.40 10.15 1.95
SINCE INCEPTION -13.61 -2.28 29.88 4.20 -16.74 -2.85
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
--------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[CHART]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
ENDED
JUNE 30,
1994* 1995 1996 1997 1998 1999 2000
---- ---- ---- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share...... $13.99 $8.91 $8.81 $8.83 $9.19 $22.59 $18.04
Market Value Per Share......... $11.25 $9.13 $9.50 $8.38 $6.75 $16.50 $12.00
Premium/(Discount)............. -19.6% 2.5% 7.8% -5.1% -26.6% -27.0% -33.5%
Capital Gains Distributions.... $ 0.17 -- -- -- -- -- --
Fund Total Return (2).......... 0.72% -36.31% -1.12% 0.23% 4.08% 145.81% -20.14%
Index Total Return (3)......... -7.88% -31.53% -6.49% 6.43% -20.98% 88.41% -10.93%
</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, expressed in U.S.
dollar terms.
* The Fund commenced operations on February 25, 1994.
3
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Investment Summary as of June 30, 2000 (Unaudited)
================================================================================
DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (91.7%)
Short-Term Investments (8.3%)
</TABLE>
--------------------------------------------------------------------------------
INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Automobiles (11.1%)
Chemicals (7.1%)
Diversified Financials (4.7%)
Diversified Telecommunication Services (4.7%)
Electrical Equipment (3.4%)
Food Products (5.0%)
IT Consulting & Services (23.5%)
Media (3.6%)
Pharmaceuticals (6.3%)
Software (3.4%)
Other (27.2%)
</TABLE>
--------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
------------
<S> <C>
1. Infosys Technology Ltd. 23.1%
2. Hero Honda Motors Ltd. 7.1
3. Housing Development Finance Corp., Ltd 4.6
4. Zee Telefilms Ltd. 3.4
5. Tata Engineering & Locomotive Ltd. 3.4
6. Bharat Heavy Electricals Ltd. 3.4
7. Mahanagar Telephone Nigam Ltd. 3.2
8. Tata Tea Ltd. 2.8
9. Cipla Ltd 2.6
10. Container Corp. of India Ltd. 2.0
----
55.6%
====
</TABLE>
4
<PAGE>
FINANCIAL STATEMENTS
---------
STATEMENT OF NET ASSETS (UNAUDITED)
---------
JUNE 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
(000)
--------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (91.6%)
(Unless otherwise noted)
--------------------------------------------------------------------------------
AUTO COMPONENTS (1.4%)
Apollo Tyres Ltd. 2,075 U.S.$ 4
Motherson Sumi Systems Ltd. 2,350 7
Motor Industries Co., Ltd. 39,942 3,265
MRF Ltd. 138,230 4,236
Rane Madras Ltd. 213,100 310
------------
7,822
------------
--------------------------------------------------------------------------------
AUTOMOBILES (11.1%)
Hero Honda Motors Ltd. 1,815,416 40,150
(a)Patheja Bros. Forgings & Stamp Ltd. 450,000 --@
Rane Engine Valves 95,700 86
Tata Engineering & Locomotive Ltd. 6,920,814 19,112
(b)TVS Suzuki Ltd. 614,622 3,488
------------
62,836
------------
--------------------------------------------------------------------------------
BANKS (2.3%)
HDFC Bank Ltd. 1,507,400 8,585
State Bank of India Ltd. 900,000 4,563
------------
13,148
------------
--------------------------------------------------------------------------------
BROADCASTING & CABLE TV (0.5%)
(a)Television Eighteen India Ltd. 211,885 2,884
------------
--------------------------------------------------------------------------------
CHEMICALS (7.1%)
Asian Paints (India) Ltd. 632,364 5,668
Aventis Cropscience India Ltd. 557,060 3,157
Castrol (India) Ltd. 652,985 4,436
Colour-Chem Ltd. 64,602 2,192
ICI India Ltd. 143,155 305
Indo Gulf Corp., Ltd. 5,930,270 5,632
Monsanto Chemicals of India 87,700 2,504
Novartis India Ltd. 407,930 7,432
Reliance Industries Ltd. 770,050 5,879
Sudarshan Chemicals Ltd. 234,552 236
Supreme Industries Ltd. 832,900 2,641
------------
40,082
------------
--------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (1.0%)
Marico Industries Ltd. 217,553 1,221
(b)Modi Xerox Ltd. 718,270 1,718
Tata Donnelley Ltd. 293,250 1,708
Thermax Ltd. 499,687 1,056
------------
5,703
------------
--------------------------------------------------------------------------------
CONSTRUCTION MATERIALS (0.5%)
Gujarat Ambuja Cements 610,861 2,668
------------
--------------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.8%)
Vikas WSP Ltd. 377,000 4,275
------------
--------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS (4.7%)
Housing Development Finance Corp., Ltd. 2,061,425 25,811
Sundaram Finance Ltd. 49,700 124
Tata Finance Ltd. 355,000 511
(a)UTI Mastergain 1,600 --@
------------
26,446
------------
--------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (4.7%)
Global Tele-Systems Ltd. 66,953 2,003
Mahanagar Telephone Nigam Ltd. 3,801,565 18,267
Videsh Sanchar Nigam Ltd. 232,712 6,305
------------
26,575
------------
--------------------------------------------------------------------------------
ELECTRIC UTILITIES (0.8%)
Tata Power Co., Ltd. 2,332,177 4,286
------------
--------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (3.4%)
Bharat Heavy Electricals Ltd. 6,338,286 18,944
Jyoti Structures Ltd. 167,700 187
------------
19,131
------------
--------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (0.2%)
(a)ITW Signode India Ltd. 814,306 1,012
------------
--------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.0%)
(a,b)Renewable Energy Ltd. 47,800 --@
------------
--------------------------------------------------------------------------------
FOOD PRODUCTS (5.0%)
Britannia Industries Ltd. 390,496 5,543
Nestle India Ltd. 170,812 1,429
Smithkline Beecham Consumer Health Care Ltd. 716,176 5,490
Tata Tea Ltd. 2,112,795 15,696
------------
28,158
------------
--------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.0%)
(a)Bausch & Lomb India Ltd. 100 --@
------------
--------------------------------------------------------------------------------
HOTELS RESTAURANTS & LEISURE (0.7%)
Indian Hotels Co., Ltd. 790,184 3,816
------------
--------------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.3%)
Carrier Aircon Ltd. 442,304 818
Phillips India Ltd. 380,444 558
Samtel Colour Ltd. 560,300 558
------------
1,934
------------
--------------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (0.4%)
(a,b)India-Info.com Private Co., Ltd. 532,875 2,291
------------
--------------------------------------------------------------------------------
IT CONSULTING & SERVICES (23.5%)
(a)HCL Technologies Ltd. 98,550 2,844
Infosys Technology Ltd. 697,075 129,874
------------
132,718
------------
--------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
SHARES VALUE
(000)
--------------------------------------------------------------------------------
<S> <C> <C>
MACHINERY (3.2%)
Chicago Pneumatic India Ltd. 274,940 U.S.$ 326
Cummins India Ltd. 746,170 7,506
Escorts Ltd. 963,466 3,053
Honda SIEL Power Products Ltd. 318,330 499
(a)Lakshmi Synthetic Machinery Ltd. 137,700 20
Revathi-CP Equipment Ltd. 277,900 1,338
(a)Sundaram Fasteners Ltd. 451,800 5,414
------------
18,156
------------
--------------------------------------------------------------------------------
MEDIA (3.6%)
New Delhi Television Ltd. 333,300 1,008
ZEE Telefilms Ltd. 1,914,419 19,210
------------
20,218
------------
--------------------------------------------------------------------------------
OIL & GAS (1.7%)
Bharat Petroleum Corp., Ltd. - New 673,869 2,910
Hindustan Petroleum Corp., Ltd. 2,099,211 6,554
------------
9,464
------------
--------------------------------------------------------------------------------
PERSONAL PRODUCTS (1.1%)
Colgate-Palmolive (India) Ltd. 280,133 1,130
Procter & Gamble Hygiene & Health Care Ltd. 103,294 1,547
Reckitt & Coleman of India Ltd. 717,531 3,296
------------
5,973
------------
--------------------------------------------------------------------------------
PHARMACEUTICALS (6.3%)
Alfa-Laval (India) 445,073 1,665
Aurobindo Pharmaceuticals Ltd. 83,800 837
Cipla Ltd. 755,385 14,616
Dabur India Ltd. 546,486 7,990
E. Merck (India) Ltd. 336,125 2,406
Hoechst Marion Roussel India Ltd. 268,505 2,880
Lupin Laboratories Ltd. 445,890 1,960
Smithkline Beecham Pharmaceuticals (India) Ltd. 19,873 68
(c)Strides Arcolab Ltd. 585,000 3,236
Sun Pharmaceutical Industries Ltd. 10 --@
------------
35,658
------------
--------------------------------------------------------------------------------
ROAD & RAIL (2.0%)
Container Corp. of India Ltd. 2,939,718 11,324
------------
--------------------------------------------------------------------------------
SOFTWARE (3.4%)
(a)Fujitsu ICIM Ltd. 298,383 1,668
(a)Hughes Software Systems 93,500 6,312
Polaris Software Lab Ltd. 109,616 2,150
Software Solution Integrated Ltd. 46,150 2,940
Tata Infotech Ltd. 113,275 730
Visualsoft (India) Ltd. 34,433 5,502
------------
19,302
------------
--------------------------------------------------------------------------------
SPECIALTY RETAIL (0.7%)
Titan Industries Ltd. 2,526,168 3,683
------------
--------------------------------------------------------------------------------
TEXTILES & APPAREL (0.5%)
Bata India Ltd. 628,678 945
(a)Delta International 570,000 --@
Mahavir Spinning Mills Ltd. 10,000 10
(a,b)Shopper Stop 444,400 1,592
Vardhaman Spinning & General Mills Ltd. 2,750 3
------------
2,550
------------
--------------------------------------------------------------------------------
TOBACCO (0.7%)
ITC Ltd. 216,516 3,853
------------
--------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost U.S.$429,026) 515,966
------------
--------------------------------------------------------------------------------
<CAPTION>
NO. OF
RIGHTS
--------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS (0.0%)
INDIA
(a)Jyoti Structures Ltd.
(Cost U.S.$@) 167,700 56
------------
--------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
--------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (8.3%)
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT (8.3%)
Chase Securities Inc. 6.15%, dated 6/31/00,
due 7/03/00, to be repurchased at U.S.$46,805,
collateralized by U.S.$47,535 United States
Treasury Bonds, valued at U.S.$47,614
(Cost U.S.$46,781) 46,781 46,781
------------
--------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.9%)
(Cost U.S.$475,807) 562,803
------------
--------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AMOUNT
(000) (000)
--------------------------------------------------------------------------------
<S> <C> <C>
OTHER ASSETS (1.8%)
Receivable for U.S.$8,568
Investments Sold
Dividends Receivable 1,055
Foreign Tax Reclaim Receivable 475
Interest Receivable 8
Other 44 U.S.$ 10,150
---------- ------------
--------------------------------------------------------------------------------
LIABILITIES (-1.7%)
Payable For:
Investments Purchased (6,032)
Bank Overdraft (1,840)
Custodian Fees (558)
Advisory Fees (507)
Fund Shares Repurchased (333)
Fees and Expenses (106)
Administrative Fees (101)
Professional Fees (63)
Shareholder Reporting Expenses (56)
Other Liabilities (225) (9,821)
---------- ------------
--------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 31,222,592, issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$563,132
============
--------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 18.04
============
--------------------------------------------------------------------------------
AT JUNE 30, 2000, NET ASSETS CONSISTED OF:
--------------------------------------------------------------------------------
Common Stock U.S.$ 312
Capital Surplus 444,673
Undistributed Net Investment Income 2,032
Accumulated Net Realized Gain 29,352
Unrealized Appreciation on Investments and
Foreign Currency Translations 86,763
--------------------------------------------------------------------------------
TOTAL NET ASSETS U.S.$563,132
============
--------------------------------------------------------------------------------
</TABLE>
(a) -- Non-income producing.
(b) -- Security valued at fair value- see note A-1 to financial statements.
(c) -- 144A Security -- certain conditions for public sale may exist.
@ -- Value is less than U.S.$500.
June 30, 2000 exchange rate -- Indian Rupee (INR) 44.65 = U.S. $1.00.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
(UNAUDITED)
STATEMENT OF OPERATIONS (000)
------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends ................................................................................ U.S.$ 5,778
Interest ................................................................................. 1,116
------------------------------------------------------------------------------------------------------------------
Total Income ............................................................................. 6,894
------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees ................................................................. 3,648
Custodian Fees ........................................................................... 508
Administrative Fees ...................................................................... 338
Professional Fees ........................................................................ 118
Directors' Fees and Expenses ............................................................. 41
Shareholder Reporting Expenses ........................................................... 31
Sub-Administrative Fees .................................................................. 19
Transfer Agent Fees ...................................................................... 10
Other Expenses ........................................................................... 55
------------------------------------------------------------------------------------------------------------------
Total Expenses ........................................................................... 4,768
------------------------------------------------------------------------------------------------------------------
Net Investment Income .................................................................... 2,126
------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
Investment Securities Sold ............................................................... 130,120
Foreign Currency Transactions ............................................................ (728)
------------------------------------------------------------------------------------------------------------------
Net Realized Gain ........................................................................ 129,392
------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
Depreciation on Investments .............................................................. (288,211)
Depreciation on Foreign Currency Translations ............................................ (101)
------------------------------------------------------------------------------------------------------------------
Change in Unrealized Appreciation/Depreciation ........................................... (288,312)
------------------------------------------------------------------------------------------------------------------
Net Realized Gain and Change in Unrealized Appreciation/Depreciation ..................... (158,920)
------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................................... U.S.$(156,794)
==================================================================================================================
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1999
STATEMENT OF CHANGES IN NET ASSETS (000) (000)
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income (Loss) .......................................... U.S.$ 2,126 U.S.$ (2,640)
Net Realized Gain ..................................................... 129,392 77,466
Change in Unrealized Appreciation/Depreciation ........................ (288,312) 360,668
------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations ....... (156,794) 435,494
------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Repurchase of Shares (1,377,900 and 1,636,300 shares, respectively) ... (16,417) (13,852)
------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) ............................................. (173,211) 421,642
Net Assets:
Beginning of Period ................................................... 736,343 314,701
------------------------------------------------------------------------------------------------------------------
End of Period (including undistributed net investment
income/(accumulated net investment loss) of U.S.$2,032 and
U.S.$(94) respectively) ............................................... U.S.$ 563,132 U.S.$ 736,343
==================================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED PER SHARE DATA SIX MONTHS
AND RATIOS: ENDED YEARS ENDED DECEMBER 31,
JUNE 30, 2000 --------------------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... U.S.$ 22.59 U.S.$ 9.19 U.S.$ 8.83 U.S.$ 8.81 U.S.$ 8.91 U.S.$ 13.99
------------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss)............ 0.07 (0.08) (0.04) (0.07) (0.08) (0.16)
Net Realized and Unrealized Gain (Loss) on
Investments............................. (4.91) 13.33 0.31 0.09 (0.02) (4.92)
------------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations........ (4.84) 13.25 0.27 0.02 (0.10) (5.08)
------------------------------------------------------------------------------------------------------------------------------------
Anti-Dilutive Effect of Shares Repurchased 0.29 0.15 0.09 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.......... U.S.$ 18.04 U.S.$ 22.59 U.S.$ 9.19 U.S.$ 8.83 U.S.$ 8.81 U.S.$ 8.91
====================================================================================================================================
PER SHARE MARKET VALUE, END OF PERIOD... U.S.$ 12.00 U.S.$ 16.50 U.S.$ 6.75 U.S.$ 8.38 U.S.$ 9.50 U.S.$ 9.13
====================================================================================================================================
TOTAL INVESTMENT RETURN:
Market Value............................ (27.27)% 144.44% (19.40)% (11.84)% 4.11% (18.89)%
Net Asset Value (1)..................... (20.14)% 145.81% 4.08% 0.23% (1.12)% (36.31)%
====================================================================================================================================
RATIOS, SUPPLEMENTAL DATA:
------------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS)... U.S.$563,132 U.S.$736,343 U.S.$314,701 U.S.$315,446 U.S.$ 314,423 U.S.$ 318,045
------------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets. 1.44%* 1.59% 1.97% 2.06% 2.10% 3.16%
Ratio of Net Investment Income (Loss) to
Average Net Assets...................... 0.64%* (0.55)% (0.44)% (0.70)% (0.85)% (1.48)%
Portfolio Turnover Rate................. 23% 34% 24% 25% 28% 28%
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized.
(1)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. This percentage is 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.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 (UNAUDITED)
---------
The Morgan Stanley Dean Witter India Investment Fund, Inc. (the "Fund")
was incorporated in Maryland on December 22, 1993, and is registered as a
non-diversified, closed-end management investment company under the
Investment Company Act of 1940, as amended. The Fund's investment objective
is long-term capital appreciation through investments primarily in equity
securities.
A. The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such policies
are consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: In valuing the Fund's assets, all listed securities for
which market quotations are readily available are valued at the last sales
price on the valuation date, or if there was no sale on such date, at the
mean between the current bid and asked prices. Securities which are traded
over-the-counter are valued at the average of the mean of current bid and
asked prices obtained from brokers. Short-term securities which mature in
60 days or less are valued at amortized cost. All other securities and
assets for which market values are not readily available (including
investments which are subject to limitations as to their sale) are valued
at fair value as determined in good faith under procedures approved by the
Board of Directors, although the actual calculations may be done by others.
Due to the Indian securities market's smaller size, degree of liquidity and
volatility, the prices which the Fund may realize upon sale of securities
may not be equal to the value presented in the financial statements.
2. TAXES: It is the Fund's intention to continue to qualify as a regulated
investment company and distribute all of its taxable income. Accordingly,
no provision for U.S. Federal income taxes is required in the financial
statements.
The rate of capital gains tax in India is 10% for long-term investments
and 30% for short-term investments. The Fund invests in India through a
registered branch office established in Mauritius and expects to obtain
benefits under the double taxation treaty between Mauritius and India. To
obtain benefits under the double taxation treaty the Fund must meet certain
tests and conditions, including the establishment of Mauritius tax
residence and related requirements. The Fund has obtained a tax residence
certification from the Mauritian authorities and believes such
certification is determinative of its resident status for treaty purposes.
A fund which is a tax resident in Mauritius under the treaty but has no
branch or permanent establishment in India, will not be subject to capital
gains tax in India on the sale of securities. The Fund is subject to and
accrues Indian withholding tax on interest earned on Indian securities at
the rate of 20%.
In Mauritius, the Fund is liable for income tax under the current Mauritian
legislation at the rate of 0%. However, the Fund may, in any year, elect to
pay tax on its net investment income at any rate between 0% and 35%.
The foregoing is based on current interpretation and practice and is
subject to any future changes in Indian or Mauritian tax laws and in the
tax treaty between India and Mauritius.
3. REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements under
which the Fund lends excess cash and takes possession of securities with an
agreement that the counterparty will repurchase such securities. In
connection with transactions in repurchase agreements, a bank as custodian
for the Fund takes possession of the underlying securities (collateral),
with a market value at least equal to the amount of the repurchase
transaction, including principal and accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the
collateral is marked-to-market on a daily basis to determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Fund has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy by
the counterparty to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in Indian rupees are
translated into U.S. dollars at the mean of the bid and asked prices of
such currency against U.S. dollars last quoted by a major bank as follows:
- investments, other assets and liabilities - at the prevailing rate of
exchange on the valuation date;
- investment transactions and investment income - at the prevailing rate
of exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rate and market values at the close of the period, the Fund does not
isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rate from the fluctu-
10
<PAGE>
ations arising from changes in the market prices of the securities held at
period end. Similarly, the Fund does not isolate the effect of changes in
the foreign exchange rate from the fluctuations arising from changes in the
market prices of securities sold during the period. Accordingly, realized
and unrealized foreign currency gains (losses) due to securities
transactions are included in the reported net realized and unrealized gains
(losses) on investment transactions and balances.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from sales and maturities of foreign
currency exchange contracts, disposition of foreign currency, currency
gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amount of
investment income and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains (losses) from valuing foreign currency
denominated assets and liabilities at period end exchange rates are
reflected as a component of unrealized appreciation (depreciation) on
investments and foreign currency translations in the Statement of Net
Assets. The change in unrealized currency gains (losses) on foreign
currency translations for the period is reflected in the Statement of
Operations.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. dollar
denominated transactions as a result of, among other factors, the
possibility of lower levels of governmental supervision and regulation of
foreign securities markets and the possibility of political or economic
instability.
The Fund may use derivatives to achieve its investment objectives. The Fund may
engage in transactions in futures contracts on foreign currencies, stock
indices, as well as in options, swaps and structured notes. Consistent with the
Fund's investment objectives and policies, the Fund may use derivatives for
non-hedging as well as hedging purposes.
Following is a description of derivative instruments that the Fund may utilize
and their associated risks:
5. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into foreign
currency exchange contracts generally to attempt to protect securities and
related receivables and payables against changes in future foreign exchange
rates and, in certain situations, to gain exposure to a foreign currency. A
foreign currency exchange contract is an agreement between two parties to
buy or sell currency at a set price on a future date. The market value of
the contract will fluctuate with changes in currency exchange rates. The
contract is marked-to-market daily and the change in market value is
recorded by the Fund as unrealized gain or loss. The Fund records realized
gains or losses when the contract is closed equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. Risk may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and is generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
6. FORWARD COMMITMENTS AND WHEN-ISSUED/DELAYED DELIVERY SECURITIES: The Fund
may make forward commitments to purchase or sell securities. Payment and
delivery for securities which have been purchased or sold on a forward
commitment basis can take place a month or more (not to exceed 120 days)
after the date of the transaction. Additionally, the Fund may purchase
securities on a when-issued or delayed delivery basis. Securities purchased
on a when-issued or delayed delivery basis are purchased for delivery
beyond the normal settlement date at a stated price and yield, and no
income accrues to the Fund on such securities prior to delivery. When the
Fund enters into a purchase transaction on a when-issued or delayed
delivery basis, it either establishes a segregated account in which it
maintains liquid assets in an amount at least equal in value to the Fund's
commitments to purchase such securities or denotes such securities assets
as segregated on the Fund's records. Purchasing securities on a forward
commitment or when-issued or delayed-delivery basis may involve a risk that
the market price at the time of delivery may be lower than the agreed upon
purchase price, in which case there could be an unrealized loss at the time
of delivery.
7. SWAP AGREEMENTS: The Fund may enter into swap agreements to exchange the
return generated by one security, instrument or basket of instruments for
the return generated by another security, instrument or basket of
instruments. The following summarizes swaps which may be entered into by
the Fund:
INTEREST RATE SWAPS: Interest rate swaps involve the exchange of
commitments to pay and receive interest based on a notional principal
amount. Net periodic interest payments to be received or paid are
accrued daily and are recorded in the Statement of Operations as an
adjustment to interest income. Interest rate swaps are marked-to-market
daily based upon quotations from market makers and the change, if any,
is recorded as unrealized appreciation or depreciation in the Statement
of Operations.
TOTAL RETURN SWAPS: Total return swaps involve commitments to pay interest
in exchange for a market-linked return based on a notional amount. To the
extent the total return of the security, instrument or basket of
instruments underlying the transaction exceeds
11
<PAGE>
or falls short of the offsetting interest obligation, the Fund will receive
a payment from or make a payment to the counterparty, respectively. Total
return swaps are marked-to-market daily based upon quotations from market
makers and the change, if any, is recorded as unrealized gains or losses in
the Statement of Operations. Periodic payments received or made at the end
of each measurement period, but prior to termination, are recorded as
realized gains or losses in the Statement of Operations.
Realized gains or losses on maturity or termination of interest rate and
total return swaps are presented in the Statement of Operations. Because
there is no organized market for these swap agreements, the value reported
in the Statement of Net Assets may differ from that which would be realized
in the event the Fund terminated its position in the agreement. Risks may
arise upon entering into these agreements from the potential inability of
the counterparties to meet the terms of the agreements and are generally
limited to the amount of net interest payments to be received and/or
favorable movements in the value of the underlying security, instrument or
basket of instruments, if any, at the date of default.
Risks also arise from potential losses from adverse market movements, and
such losses could exceed the related amounts shown in the Statement of Net
Assets.
8. STRUCTURED SECURITIES: The Fund may invest in interests in entities
organized and operated solely for the purpose of restructuring the
investment characteristics of sovereign debt obligations. This type of
restructuring involves the deposit with or purchase by an entity of
specified instruments and the issuance by that entity of one or more
classes of securities ("Structured Securities") backed by, or representing
interests in, the underlying instruments. Structured Securities generally
will expose the Fund to credit risks of the underlying instruments as well
as of the issuer of the issuer of the Structured Security. Structured
Securities are typically sold in private placement transactions with no
active trading market. Investments in Structured Securities may be more
volatile than their underlying instruments, however, any loss is limited to
the amount of the original investment.
9. OVER-THE-COUNTER TRADING: Securities and other derivative instruments that
may be purchased or sold by the Fund may consist of instruments not traded
on an exchange. The risk of nonperformance by the obligor on such an
instrument may be greater, and the ease with which the Fund can dispose of
or enter into closing transactions with respect to such an instrument may
be less, than in the case of an exchange-traded instrument. In addition,
significant disparities may exist between bid and asked prices for
derivative instruments that are not traded on an exchange. Derivative
instruments not traded on exchanges are also not subject to the same type
of government regulation as exchange traded instruments, and many of the
protections afforded to participants in a regulated environment may not be
available in connection with such transactions.
During the six month period ended June 30, 2000, the Fund's investments in the
derivative instruments described above only included foreign currency exchange
contracts.
10. OTHER: Security transactions are accounted for on the date the securities
are purchased or sold. Investments in new Indian securities are made by
making applications in the public offerings. The issue price, or a portion
thereof, is paid at the time of application and reflected as share
application money on the Statement of Net Assets. Upon allotment of the
securities, this amount plus any remaining amount of issue price is
recorded as cost of investments. Realized gains and losses on the sale of
investment securities are determined on the specific identified cost basis.
Interest income is recognized on an accrual basis. Dividend income is
recorded on the ex-dividend date (except certain dividends which may be
recorded as soon as the Fund is informed of such dividend) net of
applicable withholding taxes. Distributions to shareholders are recorded on
the ex-dividend date.
The amount and character of income and capital gain distributions to be
paid by the Fund are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting
principles. The book/tax differences are either considered temporary or
permanent in nature.
Temporary differences are attributable to differing book and tax treatments
for the timing of the recognition of gains and losses on certain investment
transactions and the timing of the deductibility of certain expenses.
Permanent book and tax basis differences may result in reclassifications
among undistributed net investment income (loss), accumulated net realized
gain (loss) and paid in capital.
Adjustments for permanent book-tax differences, if any, are not reflected
in ending undistributed net investment income (loss) for the purposes of
calculating net investment income (loss) per share in the financial
highlights.
12
<PAGE>
B. Morgan Stanley Dean Witter Investment Management Inc. (the "Adviser")
provides investment advisory services to the Fund under the terms of an
Investment Advisory and Management Agreement (the "Agreement"). Under the
Agreement, the Adviser is paid a fee computed weekly and payable monthly at an
annual rate of 1.10% of the Fund's average weekly net assets.
C. The Chase Manhattan Bank, through its corporate affiliate Chase Global Funds
Services Company (the "Administrator"), provides administrative services to the
Fund under an Administration Agreement. Under the Administration Agreement, the
Administrator is paid a fee computed weekly and payable monthly at an annual
rate of 0.09% of the Fund's average weekly net assets, plus $65,000 per annum.
In addition, the Fund is charged certain out-of-pocket expenses by the
Administrator.
Multiconsult, Ltd., whose registered office is in Mauritius, provides
sub-administrative services to the Fund, including maintaining certain Fund
records and preparing certain periodic filings, under an agreement whereby
Multiconsult is paid a fee of $22,000 per annum.
D. The Chase Manhattan Bank serves as custodian for the Fund. Custody fees are
payable monthly based on assets held in custody, investment purchase and sales
activity and account maintenance fees, plus reimbursement for certain
out-of-pocket expenses.
E. During the six month period ended June 30, 2000, the Fund made purchases and
sales totaling $143,942,000 and $199,011,000, respectively, of investment
securities other than long-term U.S. Government securities and short-term
investments. There were no purchases or sales of long-term U.S. Government
securities. At June 30, 2000, the U.S. Federal income tax cost basis of
securities was $475,807,000 and, accordingly, net unrealized appreciation for
U.S. Federal income tax purposes was $86,996,000 of which $189,430,000 related
to appreciated securities and $102,434,000 related to depreciated securities. At
December 31, 1999, the Fund had a capital loss carryforward for U.S. Federal
income tax purposes of approximately $98,061,000 available to offset future
capital gains of which $18,838,000 will expire on December 31, 2005 and
$79,223,000 will expire on December 31, 2006. To the extent that capital gains
are offset, such gains will not be distributed to shareholders.
F. During the six month period ended June 30, 2000, the Fund incurred $19,000 of
brokerage commissions with Morgan Stanley & Co. Incorporated, an affiliate of
the Adviser.
G. A significant portion of the Fund's net assets consist of Indian securities
which involve certain considerations and risks not typically associated with
investments in the United States. In addition to its smaller size, less
liquidity and greater volatility, the Indian securities market is less developed
than the U.S. securities market and there is often substantially less publicly
available information about Indian issuers than there is about U.S. issuers.
Settlement mechanisms are also less developed and are accomplished only through
physical delivery, in certain cases, which may cause the Fund to experience
delays or other difficulties in effecting transactions. At June 30, 2000,
approximately $8,339,000 of Fund securities were either out for transfer in the
name of the Fund, were under objection for transfer in the name of the Fund,
were out for dematerialization, or were due from companies and/or brokers for
various capital changes. Such securities are valued in accordance with the
Fund's security valuation policy as described in Note A-1, but may not be
saleable at the value shown in the Statement of Net Assets. The Fund has no
intention of selling such securities until they are transferred in the name of
the Fund.
Future economic and political developments in India could adversely affect the
liquidity or value, or both, of securities in which the Fund is invested. In
addition, the Fund's ability to hedge its currency risk is limited and
accordingly, the Fund may be exposed to currency devaluation and other exchange
rate fluctuations.
H. Each Director of the Fund who is not an officer of the Fund or an affiliated
person as defined under the Investment Company Act of 1940, as amended, may
elect to participate in the Directors' Deferred Compensation Plan (the "Plan").
Under the Plan, such Directors may elect to defer payment of a percentage of
their total fees earned as a Director of the Fund. These deferred portions are
treated, based on an election by the Director, as if they were either invested
in the Fund's shares or invested in U.S. Treasury Bills, as defined under the
Plan. At June 30, 2000, the deferred fees payable under the Plan, totaled
$106,000 and are included in Payable for Directors' Fees and Expenses on the
Statement of Net Assets.
I. 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 six month period ended
June 30, 2000, the Fund repurchased 1,377,900 shares or 4.23% of its Common
Stock at an average price per share of $11.86, excluding $69,000 in commissions
paid, and an average discount of 36.20% from net asset value per share. For the
year ended December 31, 1999, the Fund repurchased 1,636,300 shares or 4.78% of
its Common Stock at an average price per share of $8.42, excluding $82,000 in
commissions paid, and an average discount of 26.21% from net asset value per
share. Since the inception of the program, the Fund has repurchased 4,484,500
shares or 12.56% of its Common Stock at an average price per share of $8.86,
excluding $225,000 in commissions paid, and an average discount of 29.06% 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
of Directors.
13
<PAGE>
J. Supplemental Proxy Information
The Annual Meeting of the Stockholders of the Fund was held on June 15, 2000.
The following is a summary of the proposal presented and the total number of
shares voted:
<TABLE>
<CAPTION>
VOTES IN VOTES VOTES
PROPOSAL: FAVOR OF AGAINST ABSTAINED
--------- ---------- --------- -----------
<S> <C> <C> <C>
1. To elect the following Directors: Andrew McNally IV ........ 16,434,000 6,083,257 --
Frederick O. Robertshaw .. 16,434,000 6,083,257 --
Harold J. Schaaff, Jr..... 16,434,000 6,083,257 --
Graham E. Jones .......... 16,435,115 6,082,142 --
John D. Barrett II ....... 16,435,015 6,082,242 --
Gerard E. Jones .......... 16,435,115 6,082,142 --
RMJ Gerard La
Hausse de la Louviere..... 16,434,760 6,082,497 --
William G. Morton, Jr..... 16,435,015 6,082,242 --
Samuel T. Reeves.......... 15,802,395 6,714,862 --
</TABLE>
The Annual Meeting of the Stockholders of the Fund was reconvened on August 1,
2000. The following is a summary of the proposal presented and the total number
of shares voted:
<TABLE>
<CAPTION>
VOTES IN VOTES VOTES
PROPOSAL: FAVOR OF AGAINST ABSTAINED
--------- ---------- --------- -----------
<S> <C> <C> <C>
2. To ratify the selection of Ernst & Young LLP as independent
accountants of the Fund ......................................... 11,611,736 8,044,426 12,307
</TABLE>
--------------------------------------------------------------------------------
CHANGE IN INDEPENDENT ACCOUNTANTS:
ON JULY 5, 2000, PRICEWATERHOUSECOOPERS LLP RESIGNED AS INDEPENDENT ACCOUNTANTS
OF THE FUND. THE REPORTS OF PRICEWATERHOUSECOOPERS LLP ON THE FINANCIAL
STATEMENTS OF THE FUND FOR THE PAST TWO FISCAL YEARS CONTAINED NO ADVERSE
OPINION OR DISCLAIMER OF OPINION AND WERE NOT QUALIFIED OR MODIFIED AS TO
UNCERTAINTY, AUDIT SCOPE OR ACCOUNTING PRINCIPLE. IN CONNECTION WITH ITS AUDITS
FOR THE TWO MOST RECENT FISCAL YEARS AND THROUGH JULY 5, 2000, THERE HAVE BEEN
NO DISAGREEMENTS WITH PRICEWATERHOUSECOOPERS LLP ON ANY MATTER OF ACCOUNTING
PRINCIPLES OR PRACTICES, FINANCIAL STATEMENT DISCLOSURE, OR AUDITING SCOPE OR
PROCEDURE, WHICH DISAGREEMENTS, IF NOT RESOLVED TO THE SATISFACTION OF
PRICEWATERHOUSECOOPERS LLP, WOULD HAVE CAUSED THEM TO MAKE REFERENCE THERETO IN
THEIR REPORT ON THE FINANCIAL STATEMENTS FOR SUCH YEARS. THE FUND, WITH THE
APPROVAL OF ITS BOARD OF DIRECTORS, AUDIT COMMITTEE AND SHAREHOLDERS, ENGAGED
ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS AS OF AUGUST 1, 2000.
14
<PAGE>
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
each shareholder will be deemed to have elected, unless American Stock Transfer
& Trust Company (the "Plan Agent") is otherwise instructed by the shareholder in
writing, to have all distributions automatically reinvested in Fund shares.
Participants in the Plan have the option of making additional voluntary cash
payments to the Plan Agent, annually, in any amount from $100 to $3,000, for
investment in Fund shares.
Dividend and capital gain distributions will be reinvested on the
reinvestment date. If the market price per share equals or exceeds net asset
value per share on the reinvestment date, the Fund will issue shares to
participants at net asset value. If net asset value is less than 95% of the
market price on the reinvestment date, shares will be issued at 95% of the
market price. If net asset value exceeds the market price on the reinvestment
date, participants will receive shares valued at market price. The Fund may
purchase shares of its Common Stock in the open market in connection with
dividend reinvestment requirements at the discretion of the Board of Directors.
Should the Fund declare a dividend or capital gain distribution payable only in
cash, the Plan Agent will purchase Fund shares for participants in the open
market as agent for the participants.
The Plan Agent's fees for the reinvestment of dividends and distributions
will be paid by the Fund. However, each participant's account will be charged a
pro rata share of brokerage commissions incurred on any open market purchases
effected on such participant's behalf. A participant will also pay brokerage
commissions incurred on purchases made by voluntary cash payments. Although
shareholders in the Plan may receive no cash distributions, participation in the
Plan will not relieve participants of any income tax which may be payable on
such dividends or distributions.
In the case of shareholders, such as banks, brokers or nominees, which hold
shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
shareholder as representing the total amount registered in the shareholder's
name and held for the account of beneficial owners who are participating in the
Plan.
Shareholders who do not wish to have distributions automatically reinvested
should notify the Plan Agent in writing. There is no penalty for
non-participation or withdrawal from the Plan, and shareholders who have
previously withdrawn from the Plan may rejoin at any time. Requests for
additional information or any correspondence concerning the Plan should be
directed to the Plan Agent at:
Morgan Stanley Dean Witter India Investment Fund, Inc.
American Stock Transfer & Trust Company
Dividend Reinvestment and Cash Purchase Plan
40 Wall Street
New York, NY 10005
1-800-278-4353
15
