Exchange traded funds that invest in India are trying to make up for lost time. India stock ETFs lagged broad emerging market funds in 2012 but are off to a great start this year.

Corporate earnings and recent government reforms have stabilized the Indian economy, with focused exchange traded funds posting higher returns. The recent government reforms are supported by the majority, with more capital expected to flow into the economy.

“The measures taken by the Government to allow direct investments in the retail industry has been severely criticized but finally saw the green light when it received majority support from political parties thereby eliminating any doubt relating to implementation of the proposed plan,” Eric Dutram for Zacks wrote.

Investor-friendly reform has had a positive impact upon the WisdomTree India Earnings (NYSEArca: EPI). PowerShares India ETF (NYSEArca: PIN) and iShares S&P India Nifty Fifty Index (NYSEArca: INDY) are among the other exchange traded products for this market. [India ETFs Rise on Reform, Goldman Bulls]

The performance of Indian equities and markets is expected to resume into the new year based on the new reform and the return of foreign inflows. However, the Indian markets remain vulnerable due to similar trade and fiscal deficits. Should the growing debt levels not be tamed, ratings agencies such as Moody’s have warned that the investment-grade status could be taken away, reports Zacks. [Foreign Investment Bolsters India ETFs]