Consumers in India are in no mood to stop splurging, even as shoppers elsewhere begin to feel jittery. After surveying more than 21,000 shoppers in 38 markets, the New York-based researcher AC Nielsen on Monday ranked India at the top of its newly created list of consumer confidence.

Only 7 percent of the Indian consumers surveyed by Nielsen in May said they were finding it difficult to make ends meet, compared with 25 percent in North America and 13 percent in Europe who said they had no cash to spare.

India's score of 127 makes it a nation of "happy people," along with China, which has a confidence index of 108, Nielsen said in a press release issued from Singapore.

Optimism among Indian consumers compares with a rather gloomy score of 98 in Britain, 96 in the United States and a global average of 92.

Investors want to know how long the consumer frenzy will last. India's retail stocks are red hot. Shares of Pantaloon Retail India, which owns the Big Bazaar department stores, have more than tripled in the past year.

Shoppers' Stop, India's biggest retail chain, sold stock to investors at 238 rupees, or $5.45, per share last month. The shares are now trading above 388 rupees - a 63 percent gain for investors.

Retail is the most obvious sign of growing urbanization and affluence in India.

Investors who have put their money on the nation's prowess in computer software have now turned their attention to homegrown retail chains where the country's one million young engineers and call-center employees are spending their rising wages on everything from designer clothes and children's toys to kitchen appliances and DVDs.

"Any investment manager on a work trip to India makes it a point to visit a store like Big Bazaar or Shoppers' Stop," Aadil Ebrahim, an analyst and fund manager at Bowen Capital Management in Hong Kong, said Monday in an interview.

"He comes out so impressed, he gets into the car and immediately starts calling his trader in New York or London, telling him to buy a piece of the action," Ebrahim said.

Provogue India, an eight-year-old apparel manufacturer, runs its own stores, some of which double up as restaurants in the evenings. The company, which is selling stock to the public for the first time, is asking as much as 150 rupees, or 25 times its earnings per share.

That's hardly cheap. Shares of Wal-Mart Stores, the world's largest retailer, are trading at a price-to-earnings ratio of about 20.

However, the Indian government has yet to allow global retailers like Wal-Mart, Carrefour and Ikea into the local market. So the only way investors can profit from India's retail boom is to buy shares in companies like Provogue, which has seen 10 times as much demand for its shares than it offered to sell.

Some of the penchant for owning shares in local Indian retailers may ebb once the government of Prime Minister Manmohan Singh allows bigger overseas competitors to open stores in the country. Wal-Mart last month said that it would consider investing in India, where it sees "a bright future for retailing."

On the other hand, if global retailers are allowed to buy stakes in existing Indian companies, share prices of local retailers may rise even more.

Unless global investors have a crisis of faith in the Indian economy, the local currency and interest rates should stay supportive of spending.

India attracted $50 million in equity investments in the week that ended June 8 from emerging market funds, according to the Cambridge, Massachusetts-based Emerging Portfolio Fund Research. That compares with $38 million of inflows into Brazil and an $11 million outflow from China in the same week.

A one-year consumer loan in India is available at an interest rate of 7 percent. Five years ago, financing was twice as expensive. The Indian rupee is at 43.55 to the U.S. dollar, almost 10 percent stronger than it was in September 2001.

Moreover, India has only now begun to enjoy the so-called demographic dividend. Three out of five Indians are 15 to 64 years old, a percentage that is projected to keep rising beyond 2035. As more people in the economy work to support fewer dependents, discretionary consumer spending may increase manifold from the current $178 billion a year.

Credit card debt is on the rise in India, though it is nowhere near the exorbitant level reached in South Korea when a spending boom went bust in 2003.

Globally, the big concerns of consumers at the moment are: the state of the economy, personal health and job security. Those anxieties are rather muted in India, where nine out of 10 consumers surveyed by Nielsen said they were optimistic about their job prospects in the next 12 months.

Valuations of India's retailing companies may indeed be too high. The Indian consumer, however, is nowhere near the top. It looks like the "happy people" can stay that way - happy for now.