<PAGE>
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MORGAN STANLEY
DEAN WITTER
INDIA INVESTMENT
FUND, INC.
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THIRD QUARTER REPORT
SEPTEMBER 30, 2000 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
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
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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
Clifford Chance Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
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INDEPENDENT ACCOUNTANTS
Ernst & Young LLP
787 Seventh Avenue
New York, New York 10019
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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/im.
<PAGE>
Letter to Shareholders
----------------------
For the nine months ended September 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 -32.14% compared to -25.19% 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 September 30,
2000, the Fund's total return, based on net asset value per share, was 10.37%
compared to -30.08% for the Index. On September 30, 2000, the closing price of
the Fund's shares on the New York Stock Exchange was $10 3/8, representing a
32.3% discount to the Fund's net asset value per share.
Emerging markets hit a trouble spot in the third quarter, whipsawed by the
global turbulence in technology stocks. And in yet another sign of the changed
times, the Indian market, traditionally referred to as one of the more defensive
markets, found it hard to remain insulated from the global storm. Indian
equities sold off violently towards the end of the third quarter with another
comeback attempt failing and ending in even lower lows.
The November 1999 - March 2000 period, characterized by unprecedented valuations
and extraordinary optimism, seems like a distant memory. Our fear had always
been that the investment world was being carried away by the technological
revolution sweeping the world, reaching a crescendo with the internet being
viewed as the latest gold rush. Now market participants are behaving as if they
want to exorcise the valuation matrices of that exceptional period. Valuations
of many stocks are fast returning to more sane levels. Markets may have a
cyclical bias and a new bull market will emerge again but we doubt that the
November - March period will return anytime soon.
Accordingly, our portfolio strategy, which has evolved through the course of the
year, has been to systematically move to a defensive stance. We started the year
by significantly reducing our exposure towards the TMT (technology, media, and
telecommunication) sector. The plan was to sell into strength during the heady
first quarter. The debate then was whether to re-invest in the other sectors or
raise cash levels. As policy, we do not like to keep cash levels beyond a very
basic minimum. However, given the fact that we were going through an
extraordinary period, where markets in general were facing a hard landing
following a dizzying run, we took the unusual step of raising cash levels to an
average of around 8 - 9%.
Based on past experience, our belief was that leadership usually does not change
at the end of a bull market. If the TMT stocks were going to be de-rated, it was
unlikely that other sectors were going to be re-rated. Confidence for the market
as a whole suffers when the popular stocks fall sharply and it takes a new bull
market for fresh leadership to emerge. Our long-standing experience in India has
taught us that basic market lesson as depicted in late 1994 when the entire
market was affected when the leaders (e.g. finance firms) fell.
It is a testing time for all investors when a market's total capitalization more
than halves in just a few months. But we would like to view the recent falls as
a natural correction from the psychosis that came to afflict the investment
world. From a performance standpoint as well, it is difficult to outperform
indices following a massive outperfor-mance spell. Still, our attempt is to live
up to that challenge and protect the shareholders' investment value.
We will look to put our cash back to work in the Fund during the coming months
as we are hopeful that in terms of price destruction, the worst is behind us.
Our effort will then shift to identifying the winners of the next cycle and,
while it is hard to call what the nature of new cycle would be like, our focus
will remain on continuing to hold on to the record of sustained outperformance.
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 month period ended
September 30, 2000, the Fund repurchased 4,182,200 shares or 12.83% of its
Common Stock at an average price per share of $11.41, excluding $209,000 in
commissions paid, and an average discount of 33.12% 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 7,288,800 shares or 20.41% of its Common Stock at an average price
per share of $9.76, excluding $364,000 in commissions paid, and an average
discount of 30.91% 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.
Sincerely,
/s/Harold J. Schaaff, Jr.
Harold J. Schaaff, Jr.
PRESIDENT AND DIRECTOR
October 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 September 30, 2000 (Unaudited)
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<TABLE>
<CAPTION>
HISTORICAL TOTAL RETURN (%)
INFORMATION --------------------------------------------------------------------------
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 -37.12% -- -32.14% -- -25.19% --
ONE YEAR -21.70 -21.70% -15.68 -15.68% -11.15 -11.15%
FIVE YEAR 0.00 0.00 49.13 8.32 -3.51 -0.71
SINCE INCEPTION* -25.31 -4.32 10.37 1.51 -30.08 -5.28
</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 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 $ 15.33
Market Value Per Share .......... $ 11.25 $ 9.13 $ 9.50 $ 8.38 $ 6.75 $ 16.50 $ 10.38
Premium/(Discount) .............. -19.6 % 2.5 % 7.8 % -5.1 % -26.6 % -27.0 % -32.3 %
Capital Gains Distributions ..... $ 0.17 -- -- -- -- -- --
Fund Total Return (2) ........... 0.72% -36.31% -1.12% 0.23% 4.08% 145.81% -32.14%
Index Total Return (3) .......... -7.88% -31.53% -6.49% 6.43% -20.98% 88.41% -25.19%
</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. Portfolio Summary as of
September 30, 2000 (Unaudited)
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DIVERSIFICATION OF TOTAL INVESTMENTS
[PIE CHART]
<TABLE>
<S> <C>
Equity Securities (90.5%)
Short-Term Investments (9.5%)
</TABLE>
--------------------------------------------------------------------------------
INDUSTRIES
[PIE CHART]
<TABLE>
<S> <C>
IT Consulting & Services (20.9%)
Automobiles (10.9%)
Pharmaceuticals (8.1%)
Chemicals (7.4%)
Food Products (5.1%)
Diversified Financials (4.1%)
Electrical Equipment (3.1%)
Machinery (2.7%)
Oil & Gas (2.5%)
Communications Equipment (2.3%)
Other* (32.9%)
</TABLE>
-------------------------------------------------------------------------------
TEN LARGEST HOLDINGS**
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
----------
<S> <C>
1. Infosys Technologies Ltd. 20.0%
2. Hero Honda Motors Ltd. 7.6
3. Housing Development Finance Corp., Ltd. 4.0
4. Bharat Heavy Electricals Ltd. 3.1
5. Tata Engineering & Locomotive Co., Ltd. 2.8
6. Cipla Ltd. 2.6
7. Global Tele-Systems Ltd. 2.3
8. Container Corp. of India Ltd. 2.1
9. Dabur India Ltd. 1.9
10. Zee Telefilms Ltd. 1.9
----
48.3%
----
----
</TABLE>
* Other includes industries not shown separately and other assets and
liabilities.
** Excludes short-term investments.
4
<PAGE>
INVESTMENTS (UNAUDITED)
-------------
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (87.5%)
(Unless otherwise noted)
---------------------------------------------------------------------------
AUTO COMPONENTS (2.2%)
Apollo Tyres Ltd. 2,075 U.S.$ 3
Motherson Sumi Systems Ltd. 400 2
Motor Industries Co., Ltd. 39,942 3,032
MRF Ltd. 138,230 2,720
Rane (Madras) Ltd. 213,100 209
Sundaram Fasteners Ltd. 451,800 3,754
-------------
9,720
-------------
---------------------------------------------------------------------------
AUTOMOBILES (10.9%)
Hero Honda Motors Ltd. 1,827,232 32,916
Patheja Forgings & Auto Parts Ltd. 450,000 -- @
Rane Engine Valves Ltd. 92,650 66
Tata Engineering &
Locomotive Co., Ltd. 6,920,814 12,192
TVS Suzuki Ltd. 614,622 2,286
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47,460
-------------
---------------------------------------------------------------------------
BANKS (1.8%)
HDFC Bank Ltd. 1,507,400 7,767
-------------
---------------------------------------------------------------------------
BROADCASTING & CABLE TV (0.5%)
Television Eighteen India Ltd. 211,885 2,152
-------------
---------------------------------------------------------------------------
CHEMICALS (7.4%)
Asian Paints (India) Ltd. 1,194,393 5,716
Aventis Cropscience India Ltd. 557,060 2,477
Colour-Chem Ltd. 64,602 1,243
ICI (India) Ltd. 25,000 38
Indo Gulf Corp., Ltd. 5,730,270 4,343
Monsanto India Ltd. 73,700 1,616
Novartis India Ltd. 407,930 7,076
Reliance Industries Ltd. 997,000 7,429
Sudarshan Chemical
Industries Ltd. 234,552 212
Supreme Industries Ltd. 816,900 2,074
-------------
32,224
-------------
---------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.2%)
Modi Xerox Ltd. 718,266 915
-------------
---------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT (2.3%)
Global Tele-Systems Ltd. 395,000 9,991
-------------
---------------------------------------------------------------------------
CONSTRUCTION MATERIALS (0.5%)
Gujarat Ambuja Cements Ltd. 650,861 2,197
-------------
---------------------------------------------------------------------------
CONTAINERS & PACKAGING (0.8%)
Vikas WSP Ltd. 340,000 3,512
-------------
---------------------------------------------------------------------------
DIVERSIFIED FINANCIALS (4.1%)
Housing Development Finance
Corp., Ltd. 1,823,076 U.S.$ 17,263
Tata Finance Ltd. 355,000 526
UTI Mastergain 1,600 -- @
-------------
17,789
-------------
---------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.6%)
Mahanagar Telephone Nigam Ltd. 902,913 2,154
Videsh Sanchar Nigam Ltd. 25,214 401
-------------
2,555
-------------
---------------------------------------------------------------------------
ELECTRIC UTILITIES (0.8%)
Jyoti Structures Ltd. 167,700 117
Tata Power Co., Ltd. 2,242,933 3,368
-------------
3,485
-------------
---------------------------------------------------------------------------
ELECTRICAL EQUIPMENT (3.1%)
Bharat Heavy Electricals Ltd. 5,928,286 13,409
-------------
---------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS (1.5%)
Hughes Software Systems Ltd. 150,000 3,884
Siemens India Ltd. 446,825 2,766
-------------
6,650
-------------
---------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.0%)
Renewable Energy Ltd. 47,800 -- @
-------------
---------------------------------------------------------------------------
FOOD PRODUCTS (5.1%)
Britannia Industries Ltd. 504,901 7,241
Nestle India Ltd. 107,320 1,147
SmithKline Beecham
Consumer Healthcare Ltd. 755,641 6,509
Tata Tea Ltd. 1,642,610 7,158
-------------
22,055
-------------
---------------------------------------------------------------------------
HOTELS RESTAURANTS & LEISURE (0.9%)
Indian Hotels Co., Ltd. 790,184 4,009
-------------
---------------------------------------------------------------------------
HOUSEHOLD DURABLES (0.4%)
Carrier Aircon Ltd. 549,123 1,106
Samtel Colour Ltd. 559,500 474
-------------
1,580
-------------
---------------------------------------------------------------------------
INTERNET SOFTWARE & SERVICES (0.5%)
India-Info.com Private Co., Ltd. 532,875 2,225
-------------
---------------------------------------------------------------------------
IT CONSULTING & SERVICES (20.9%)
HCL Technologies Ltd. 98,550 2,471
Infosys Technologies Ltd. 544,045 86,891
Subex Systems Ltd. 194,912 1,522
-------------
90,884
-------------
---------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
---------------------------------------------------------------------------
<S> <C> <C>
MACHINERY (2.7%)
Chicago Pneumatic India Ltd. 274,940 U.S.$ 337
Cummins India Ltd. 1,008,313 7,595
Escorts Ltd. 742,466 1,345
Lakshmi Synthetic Machinery
Manufacturers Ltd. 137,700 20
Revathi-CP Equipment Ltd. 277,800 1,341
Shriram Honda Power
Equipment Ltd. 318,330 485
Thermax India Ltd. 499,687 805
-------------
11,928
-------------
---------------------------------------------------------------------------
MEDIA (2.1%)
New Delhi Television Ltd. 333,300 979
Zee Telefilms Ltd. 828,919 8,093
-------------
9,072
-------------
---------------------------------------------------------------------------
OIL & GAS (2.5%)
Bharat Petroleum Corp., Ltd. 673,869 2,381
Castrol (India) Ltd. 683,434 3,510
Hindustan Petroleum Corp., Ltd. 2,099,211 4,938
-------------
10,829
-------------
---------------------------------------------------------------------------
PERSONAL PRODUCTS (2.2%)
Colgate-Palmolive (India) Ltd. 768,652 2,654
Indian Shaving Products Ltd. 29,732 485
Procter & Gamble Hygiene and Health Care Ltd. 134,294 1,836
Reckitt & Coleman of India Ltd. 780,778 4,680
-------------
9,655
-------------
---------------------------------------------------------------------------
PHARMACEUTICALS (8.1%)
Alfa-Laval (India) Ltd. 454,515 1,790
Aurobindo Pharmaceuticals Ltd. 182,391 1,589
Cipla Ltd. 755,385 11,284
Dabur India Ltd. 641,007 8,346
E. Merck (India) Ltd. 336,125 2,557
Hoechst Marion Roussel Ltd. 234,505 2,144
Lupin Laboratories Ltd. 643,759 2,547
Parke-Davis (India) Ltd. 120,348 772
Pfizer Ltd. 127,863 1,570
Strides Arcolab Ltd. 585,000 2,799
-------------
35,398
-------------
---------------------------------------------------------------------------
ROAD & RAIL (2.1%)
Container Corp. of India Ltd. 3,514,718 9,173
-------------
---------------------------------------------------------------------------
SOFTWARE (1.4%)
Fujitsu ICIM Ltd. 225,054 759
Polaris Software Lab Ltd. 109,616 1,415
Tata Infotech Ltd. 107,764 559
VisualSoft Technologies Ltd. 117,581 3,564
-------------
6,297
-------------
---------------------------------------------------------------------------
SPECIALTY RETAIL (0.7%)
Titan Industries Ltd. 2,596,168 U.S.$ 2,826
-------------
---------------------------------------------------------------------------
TEXTILES & APPAREL (0.4%)
Bata India Ltd. 140,024 146
Delta International Ltd. 570,000 -- @
Mahavir Spinning Mills Ltd. 10,000 9
Shopper Stop 444,400 1,546
-------------
1,701
-------------
---------------------------------------------------------------------------
TOBACCO (0.8%)
ITC Ltd. 221,516 3,455
-------------
---------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost U.S.$410,912) 380,913
-------------
---------------------------------------------------------------------------
FACE
AMOUNT
(000)
---------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (9.1%)
---------------------------------------------------------------------------
REPURCHASE AGREEMENT (9.1%)
(a)Chase Securities, Inc., 6.25% dated
9/29/00, due 10/02/00
(Cost U.S.$39,685) U.S.$ 39,685 39,685
-------------
---------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (0.0%)
Indian Rupee
(Cost U.S.$358) INR 7,471 163
-------------
---------------------------------------------------------------------------
TOTAL INVESTMENTS (96.6%)
(Cost U.S.$450,955) 420,761
-------------
---------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (3.4%)
Other Assets U.S.$ 57,759
Liabilities (42,984) 14,775
--------------------- -------------
---------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 28,418,292, issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$ 435,536
=================
---------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 15.33
=================
---------------------------------------------------------------------------
</TABLE>
(a) -- The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of
this schedule of investments. The investment in the repurchase
agreement is through participation in a joint account with
affiliated funds.
@ -- Value is less than U.S.$500.
September 30, 2000 exchange rate - Indian Rupee (INR) 45.980= U.S.$ 1.00.
6
