'BRIC' ETF Investing: Getting Started in India

India is a country with mind-blowing economic potential in the coming years. As is, its economy is growing at a rate of over 9% per year (see data from India's Central Statistical Organisation).

Now, with two India-focused exchange-traded funds (ETFs ) in development, here is a primer on India and how you can get a share of the "I" action in BRIC.

BRIC Recap

BRIC is the term investors use to describe the emerging economies of Brazil, Russia, India and China (see "'BRIC' ETF Investing: An Introduction"). The BRIC countries are the poster children of emerging-market investing. Each country is estimated to become an economic powerhouse within the next several decades.

Whether or not you believe the hype surrounding BRIC, the returns are irrefutable. BRIC securities have pounded returns well into the double digits this year with no signs of slowing down, including India-based companies such as ICICI Bank (IBN Quote) and Mahanagar Telephone Nigam (MTE Quote) (see the "Portfolio Tracking" section of Stockpickr's "Highest-Yielding BRIC Stocks" portfolio).

So, Why India?

There are a couple of reasons why Indian investments could be an attractive addition to your portfolio. First, outsourcing has become the name of the game here in the U.S., and India is one of our favorite places to send offshore service jobs. The West's increasing exposure to the Indian economy is opening up a pipeline of cash (see cash flow ) to Indian companies.

Second, India has a growing middle class that's educated, hardworking and filled with entrepreneurial ambition. Combined, it's the recipe for a great emerging-market investment.

While the first steps in India's economic growth have been predominately in manufacturing jobs and broad customer service jobs, Indian workers are starting to move into more specialized service jobs. Financial services, information technology and research are among the more focused and advanced-level services that Indians are now beginning to provide on a regular basis. Workers in these specialized roles earn more money and help provide Indian contracting companies with the wherewithal to make an impact on the international stage.