Despite somewhat retreating this year, India stocks and country-specific exchange traded funds show long-term potential as urbanization and favorable demographics help support the economy ahead.

Year-to-date, the WisdomTree India Earnings Fund (NYSEArca: EPI) dipped 2.1%, iShares India 50 ETF (NasdaqGM: INDY) fell 1.0%% and PowerShares India Portfolio (NYSEArca: PIN) was up 1.5%.

Looking at the long-term outlook, Jim O’Neill, the former Goldman Sachs Asset Management chairman, argued that India has the best demographics among big emerging countries, which will help the country become an increasingly important source of labor for global corporations, reports Vaishali Gauba for CNBC. [India ETFs May Be a Bright Spot in Slowing Emerging Markets]

“India has fantastic demographics. With urbanization in its early stages, size of the working population and productivity, India has great growth potential,” O’Neill said on CNBC.

India is growing its supply of labor, which could draw more foreign direct investments. Moreover, labor is much cheaper as India’s hourly wage in the manufacturing sector is 92 cents, compared to $3.52 in China. By 2030, India’s 500 million labor force could grow to equal the combined labor force of France, Germany, Italy and the United Kingdom, O’Neill added.

“India has a labor opportunity and can see substantial investment throughout the next 30 to 40 years,” Rafiq Dossani, director of Rand Center for Asia Pacific Policy, said in the article. “Europe, USA and Japan are very keen to look at India as an alternative for labor.”

Prime Minister Narendra Modi’s administration has a pro-business stance, pushing the “Make in India” campaign to boost manufacturing by improving the country’s infrastructure. Additionally, the administration is maintaining a “minimum government, maximum governance” policy in an attempt to diminish the huge bureaucracy, which O’Neill argued was a major roadblock.