India’s ETFs: Still Growing, But There’s Room for More

September 9th at 12:00pm by Tom Lydon

ETF IndaAfter the economic upheaval, India’s economy and its exchange traded funds (ETFs) have started to settle into a natural rhythm of growth, but that growth may not truly return back to normal until next year.

Right after last year’s financial collapse, India’s growth was around 5.8%, which was the average growth for about 25 years before India saw fast-paced growth, remarks T N Ninan for rediff Business. Now, India is expected to report 6% growth for the year despite suffering a drought on top of a industrial recession.

According to Tony Sagami at Uncommon Wisdom, India is growing the most in these areas:

  • Electricity consumption is up 6.2%
  • Manufacturing is up 3.4%
  • Mining and financial services are up 7.9% and 8.1%, respectively
  • Government spending rose to 9.9% of GDP (up from 9.6% in the same period last year)

Once India rebounds from a poor crop year and resumes normal economic growth, the economy might see an average 8.5% growth per year. The Planning Commission is projecting an 8.5% growth for at least the next year and for the year after.

As the impact of fiscal stimulus comes to fruition, 80% of India’s companies are becoming more optimistic about recovery and growth¬† performances in the coming months, according to rediff Business. But a majority of participants feel that high fiscal deficit and massive borrowing could result in higher interest rates.

  • WisdomTree India Earnings (NYSEArca: EPI): up 75.8% year-to-date

ETF EPI

  • PowerShares India (NYSEArca: PIN): up 63.4% year-to-date

ETF PIN

For more information on India, visit our India category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Tickers

EPI PIN