NEW YORK (

ETF Digest

) -- As one of the four BRIC countries (Brazil, Russia, India and China), with a quickly developing economy and an average growth rate at nearly 9% per year, India might look like an ideal investment opportunity.

This country of more than a billion people has made several moves to open itself up to foreign investment and liberalize its economy, including the privatization of publicly held companies, industrial regulation improvements and capital market reforms. Although more-developed economies were swooning during the 2008 financial crisis, India still managed a respectable 6% growth rate.

The Bombay Stock Exchange (BSE Sensex) was trading at a three-week high last week before tumbling on news from the Indian commerce ministry last Wednesday that wholesale price index inflation had risen a higher-than-expected 6.95% over last year.

It was the first time India's monthly inflation rate had grown in the preceding five months. The losses probably would have been more severe if the Reserve Bank of India hadn't announced a 75-basis-point cut for its cash reserve ratio rate on banks.

Still, Indian exchange-traded products have performed well in 2012, registering gains of as much as 40% since the beginning of 2012 before pulling back last week.

The

WisdomTree India Earnings Fund

(EPI) - Get Report

tracks the WisdomTree India Earnings Index (WTIND). It is by far the most liquid of the India ETFs, with an average daily volume of 2.6 million.

According to the fund's Web site, the index is weighted fundamentally and "measures the performance of companies incorporated and traded in India that are profitable and that are eligible to be purchased by foreign investors."

Its top three holdings are

Reliance Industries Ltd.

at 7.62%,

Infosys Ltd.

(INFY) - Get Report

at 7.1%, and

Tata Motors Ltd.

(TTM) - Get Report

at 5.64%. It is most heavily concentrated in financials (26.46%) and energy (17.88%). EPI has a very high expense ratio of 0.83%.

Although it is much less liquid, with a daily average volume of just 106,000 shares, the

iPath MSCI India Index ETN

(INP)

is another viable option for investors.

It tracks the MSCI India Total Return Index, "a free-float-adjusted market capitalization index designed to measure the market performance, including price performance and income from dividend payments, of Indian equity securities."

INP has similar but different allocations, with 8.89% in Reliance Ltd., 8.76% in Infosys Ltd. and 6.24% in

Housing Development Finance

. Its top sector allocations are financials (28%), information technology (15%) and energy (12.8%).

EPI (red) and INP (green) have performed very similarly, with INP slightly underperforming EPI. EPI's year-to-date gains briefly touched the 40% mark in late February. In blue, the Bombay Stock Exchange (BSE Sensex).

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