Emerging markets stocks and exchange traded funds are extending their bearish ways to start 2016, but there are some positive signs for at least niche ETF tracking one of the largest emerging economies.

The EGShares India Consumer ETF (NYSEArca: INCO), which tracks the Indxx India Consumer Index of 30 Indian consumer companies, could turn out to be one of the better-performing single-country emerging markets ETFs this year if economic growth in Asia’s third-largest economy is as robust as expected.

“Robust GDP growth, cheaper food and energy prices should all be good for Indian consumer confidence, which has remained resilient in the past few months … Moreover, the production of goods catering to the Indian consumer has continued to increase. Last year, growth in industrial production of consumer goods (+1.3% year over year), especially consumer durables remained in positive territory in the last few months,” according to a Pavillion Global Markets note posted by Dimitra DeFotis of Barron’s.

Early last year, Indian stocks and ETFs were helped by a controversial update to India’s official GDP-estimation methodology, which could have bolstered recent readings by over two percentage points. Slack earnings and uncertainty regarding taxes on foreign investors are among the issues that have recently hindered Indian stocks. [Living Large With a Leveraged India ETF]

Enticing money managers, India’s economy is expected to expand faster than its BRIC – Brazil, Russia, India and China – counterparts. India’s trade imbalances are also diminishing and the country’s currency and stocks have held up, or at least haven’t sold off as rapidly.

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