India exchange traded funds have weakened this year on soaring inflation and quickly depreciating rupee currency, but favorable monsoon rains, greater rural demand and an uptick in exports could support Indian equities in 2014.

Some observers are anticipating higher economic growth in India as investor confidence in Indian equities rises on a jump in exports, elections next year, a halt to interest rate hikes and now expectations that monsoon rains will help support the rural base, reports Rajhkumar K Shaaw for Bloomberg.

“The optimism comes from the fact that GDP estimates are being upgraded because exports are picking up and good monsoon rains will translate into better rural demand,” Rakesh Arora, the head of research at Macquarie Group Ltd., said in the article. “Three months ago, everyone was cutting GDP to below 4 percent.”

Agriculture Minister Sharad Pawar projects food-grain output in the 2013-14 season could hit a record high as India experiences 37 inches of rain in the annual wet season, the most in six years.

Consequently, the increased harvest, along with a $77 billion government subsidy, would help India’s 600,000 villages to spend on goods.

Moreover, the government is expected to “fast-track” 255 infrastructure projects worth $162 billion.

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