India’s exchange traded funds (ETFs) are on a forward march, with the country’s benchmark index entering what some analysts believe to be a bull market. Can it stay there? Here are a few reasons why the answer may be yes.

  • Christopher Wood, strategist at CLSA Asia-Pacific Markets, predicts that the country’s annual economic growth may top 9% in the next five years, which would make the country the world’s fastest-growing major economy. The economy expanded 8.8% in the second quarter year-over-year. [Agriculture Sector Threatens India ETFs.]
  • India is seen as the only economy in Asia driven by domestic demand. India’s export gains fell more than 50% in July to 13.2% from the previous month. [Best ETFs to Play India.]
  • The Reserve Bank of India is reducing its credit-tightening policies as inflation abates and companies signal a peak in short-term borrowing costs, reports Anil Varma for Bloomberg. The Central Bank estimates that inflation will drop to 6% by March 31, compared to an average 10.5% in the first seven months of the year. Bond yields have widened to 0.63% against swap rates since February.

Better-than-expected growth numbers may prompt the central bank to further adjust interest rates, but current monetary policies still favor growth over inflation. [Chindia: Two Great Economies in One ETF.]

For more information on India, visit our India category. The ETF Analyzer shows several ways to directly access India’s economy by using ETFs, including these four. There are also leveraged and sector plays, so stop by the Analyzer and click on the ticker symbols to learn all about them!

  • PowerShares India (NYSEArca: PIN)
  • WisdomTree India Earnings (NYSEArca: EPI)
  • iShares S&P India Nifty 50 Index (NYSEArca: INDY)
  • EG Shares Indxx India Small Cap ETF (NYSEArca: SCIN)

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.