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This article originally appeared on RealMoney.com onSept. 4, 2014 at 4:00 p.m. To read more content like this AND see inside Jim Cramer's multi-million dollar portfolio for FREE...Click Here NOW.

I haven't written a full column about India and investment performance and opportunities there since Narendra Modi and the Bharatiya Janata Party (BJP) won a commanding victory last May. Modi ran his campaign for prime minister with an almost unilateral promise to focus on the Indian economy, by removing regulatory and other governmental hindrances to growth and spurring foreign investment in the country's infrastructure and other areas.

Foreign investors responded enthusiastically to the campaign promises by driving Indian equities and ETFs up dramatically leading into the election. With his first 100 days now behind him this is a good time to review what's transpired since I last wrote about specific investment opportunities there last April.

Since April, the WisdomTree India Earnings ETF (EPI) - Get WisdomTree India Earnings Fund Report , EGShares India Infrastructure (INXX) , and iShares India 50 (INDY) - Get iShares India 50 ETF Report  are each up about 20%. Direxion Daily India Bull 3X ETF (INDL) - Get Direxion Daily MSCI India Bull 2X Shares Report  is up about 60%.

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Year to date, since investors, especially those outside of India, began to anticipate a Modi/BJP win, the returns have been almost exactly twice that, with the first three up about 40% and the Direxion Daily India Bull 3X ETF up about 120%.

Given these phenomenal returns, it is prudent to try to determine if they are rational can continue. The money flowing into the U.S. listed and traded ETFs and ADRs is speculative in nature. So, in order for those expectations to be met, real foreign direct investment (FDI) into India is the first thing to check.

The FDI is the capital that is deployed into creating the investments in infrastructure, technology, and the service sector there that will produce the revenue and earnings that the speculative money flowing into the ETFs and ADRs is betting on.

On that front, the story is very positive. FDI is indeed increasing at a phenomenal rate and is expected to double to $60 billion dollars during the current fiscal year -- from $30 billion last year to $1 trillion dollars (cumulatively) between 2012 and 2017. This capital is flowing in to all sectors and from all over the world as well.

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Given this rate of increase, the returns to date for the ETFs and largest ADRs appear to be warranted and even conservative. The money flowing into the country is also following the traditional path of moving first into the largest companies and banks and then into the smaller companies.

With a market cap of about $250 billion HDFC Bank (HDB) - Get HDFC Bank Ltd. Report  is the largest Indian ADR by far. It is up about 50%, year to date. ICICI Bank (IBN) - Get ICICI Bank Ltd. Report  with a market cap of about $30 billion is up about 33%, year to date. The largest non-bank ADR is Infosys (INFY) - Get Infosys Ltd. Report  and it up only about 10% this year. It is, however, the only one of the top 10 Indian ADR's that may be considered an income vehicle with a 2.4% dividend yield.

Every other company either pays no yield or something in the 1% range or less. The entire countries equities sector is geared for growth. The next ADR based on market cap, also at about $30 billion, is Tata Motors (TTM) - Get Tata Motors Ltd. Report , which is up about 63% this year.

Then there is Wipro (WIT). It too has a market cap of about $30 billion but its year-to-date return has been about 0%, although trailing 12 months is about 33%. For speculators looking to take a long-term position in individual companies rather than an ETF, this looks like an excellent opportunity at the current price when compared to the performance of other similar sized companies and its focus on technology integration for the financial sector.

Right now, based on market cap, the sizes start to fall substantially. As a result, the performance of the smallest of the top 10 ADRs has underperformed the performance of the largest. It's probable that speculators will soon begin flowing capital into these companies simply because they are now cheap in relation to the largest.

Sesa Sterlite (SSLT) , with a market cap of about $13 billion, is up about 45% this year. Dr. Reddy's Laboratories (RDY) - Get Dr. Reddy's Laboratories Ltd. Report , with a market cap of about $8 billion, is up about 23%. WNS (Holdings) (WNS) - Get WNS (Holdings) Ltd. Report , with a market cap of about $1 billion, is actually down about 3% year to date. Sify Technologies (SIFY) - Get Sify Technologies Ltd. Report , with a market cap of about $290 million is also down this year, by about 4%. And lasy, Rediff.com India (REDF)  with a capitalization of about $67 million is only up about 4%, year to date.

Although the entire universe of Indian equities seems reasonably priced, even given the phenomenal performance of the largest, the smaller companies look primed to become the recipients of U.S. speculative inflows soon.

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At the time of publication, Arnold was long SCIF.