Nevertheless, there are other risks. For instance, a sudden jump in oil prices would significantly slow India’s growth. Indian equities are also prone to volatility and heavily depends on foreign investments. Any signs of weakness could cause foreigners to exit positions.
Moreover, since the India ETFs do not hedge their currency exposure, a sudden exodus of foreign investors, volatility in the Indian rupee and the current account deficit could all pull on the country’s currency and further weigh on India-related ETFs.
WisdomTree India Earnings Fund
For more information on India, visit our India category.
Max Chen contributed to this article.