India’s exchange traded funds (ETFs) got hit hard by yesterday’s rioting in Bangladesh, but there’s little reason to believe that India’s growth will be permanently damaged by what happened to its neighbor.

That said, India could be looking at a more tempered form of growth in 2011.

Economists believe that India’s economy could slow to 8% because of high inflation, fiscal deficit and current account deficits, according to Money Control. Nevertheless, Finance Minister Pranab Mukherjee maintains that the economy will improve to 9% in 2011. [This Sector Could Power India ETFs in 2011.]

One bugaboo remains inflation. The RBI has tried to constrain inflation through raising rates, but it still stands at 8%. A stronger rupee could be problematic for exports; Wells Fargo & Co. projects that the Indian rupee will appreciate up to 10% against the U.S. dollar as India’s Central Bank ticks off more interest rate hikes, as stated by Minyanville.

All that aside, India is still on track to become one of the world’s major players in the coming years. The consultancy group PriceWaterhouseCoopers stated that the Indian economy will experience the second-fastest growth between now and 2050. India will also become the second-largest economy in the world by 2050, reports Ashis Ray for The Times of India.

For more information on India, visit our India category.

There are a host of ETFs available to give you exposure to India (get the full list in the ETF Analyzer), including these:

  • PowerShares India (NYSEArca: PIN) and WisdomTree India Earnings (NYSEArca: EPI) are both primarily large-cap funds that hold companies in India.
  • WisdomTree Dreyfus Indian Rupee ETF (NYSEArca: ICN). The fund holds a combination of U.S. money market securities with forward currency contracts and currency swaps that mimic a money market security denominated in Indian rupees.
  • WisdomTree Dreyfus Emerging Currency ETF (NYSEArca: CEW). The fund holds a basket of currencies from emerging markets that could raise rates due to their rapidly increasing inflation rates. India is 8.25%.

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.