After turning in the best performances among the BRIC exchange traded funds last year, India ETFs are turning in another batch of solid performances this year, trailing only their Russia counterparts among the major BRIC funds.

Last year, Indian equities and the aforementioned ETFs were buoyed by the landslide victory for Hindu nationalist Narendra Modi in the country’s national elections. In 2015, other factors are supporting India ETFs, including low oil prices (India is a net importer of crude) and two surprise rate cuts from the Reserve Bank of India.

Even with last year’s surges and impressive performances to start 2015, India ETFs have the potential to deliver more upside this year. [India ETFs: Best in the BRIC House]

Tactical India ETFs have worked well this year, including the EGShares India Small Cap ETF (NYSEArca: SCIN) and the EGShares India Infrastructure Index Fund (NYSEArca: INXX). Those ETFs are up an average of 6.6% this year.

“Reforms are expected to revive economic growth and the government balance sheet. In India, these include foreign direct investment, deregulations of diesel prices, privatization, land acquisition bill, coal and power sector, direct transfer subsidies, rationalizing tax regime and goods and services tax,” according to Emerging Global, parent company of EGShares, the issuer of INXX and SCIN.

Last year, the Reserve Bank of India exempted banks issuing infrastructure-related bonds from cumbersome reserve requirements that deterred issuance of such bonds. India’s infrastructure system is universally viewed as poor, if not decrepit, as the country has not prioritized those projects in a fashion similar to China. [India Infrastructure ETF Gets a Boost]

However, Modi’s efforts to improve that situation have sent shares of INXX higher by almost 27% over the past year. Underscoring the strength in Indian stocks, INXX’s 12-month performance is just half that of SCIN.

SCIN’s nearly 25% combined weight to consumer sectors has been a driving force behind the ETF’s stellar run, one that can continue as oil prices continue tumbling.

“The lower price of oil and better fiscal management, including cutting government subsidies, are helping to reduce the fiscal deficit,” according to EGShares. “India is also focused on managing inflation, which helps the central bank to lower interest rates; a strengthening rupee prevents the erosion of return for U.S. investors.” [Inside India Consumer ETFs]

Speaking of the Indian consumer, the EGShares India Consumer ETF (NYSEArca: INCO), is up more than 14% and a jaw-dropping 59% over the past year. INCO, the only India ETF with a five-star rating from Morningstar, tracks the Indxx India Consumer Index of 30 Indian consumer companies.

Even those performances, Indian stocks have room for earnings growth and are not excessively valued.

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