Japan’s retail investors are pouring money into Indian stocks amid bets that the nation will be the next China.

Total assets of India equity-focused investment trusts in Japan grew 11%, or ¥237 billion ($1.6 billion), in January, according to data compiled by Bloomberg. Factoring in the gains of Indian stocks on a yen basis last month, the figures suggest inflows of about ¥140 billion into India equity funds, while Japanese stock funds had almost no net inflows.

The investment into Indian equities extended the country’s lead over its peers as Japan’s favorite emerging stock market, partly thanks to tax-free investment accounts that started this year. Holdings of India’s stocks rose more than those of any other developing economy last year, according to an analysis of government data that factor in net purchases and asset prices.