When it comes to emerging markets, India has to be the leader when it comes to disappointment. Despite having all the hallmarks of an amazing investment- such as a huge growing middle and consumer class- India just hasn’t lived up to its promise or hype.

Much of that disappoint can be seen from the nation’s political system.

Despite being a democracy, India has been fraught with fraud and bureaucratic red-tape/inefficiencies that have stifled growth and caused widespread inflation in the country. However, with India’s people finally being fed up with the lack of economic growth, they have gone to polls. With newly elected officials in several Indian states predicting a massive change in the ruling party, the good times in India could finally be happening. For investors, the time to bet on India could be now.

Widespread Wins

India has traditionally thrived in spite of its government. Unfortunately, since the end of the Great Recession that hasn’t held true. But there is hope on the way as mid-term elections on the nation have resulted in a major party change in India’s parliament.

Across the key states of Rajasthan, Madhya Pradesh and Chhattisgarh, the Bharatiya Janata Party (BJP) managed to secure an absolute majority versus the incumbent Indian National Congress (INC). The BJP managed also to get plurality in the fourth state of Delhi. While that’s a huge win for the BJP, it could be huge win for investors as well. 

The BJP is seen as more business friendly party and is more likely to push through economic overhauls and build the various infrastructure that India needs to grow. Already, BJP prime minster candidate Narendra Modi has pledged to run on a platform of boosting infrastructure spending, job growth and ending stubbornly high inflation. Ending corruption has also taking center-stage at the BJP. Many analysts blame the high level of kickbacks, and red-tape as a reason for India’s recent lackluster growth.

Building on the back of the critical change in India’s political system are various pieces of data in the beginning stages of real recovery.

According to HSBC’s (HBC) latest Purchasing Managers’ Index (PMI) for the nation, India is finally in expansion mode when it comes to manufacturing. The metric read a positive 51.3 vs. 49.6 the previous month. Additionally, India’s trade deficit narrowed as exports rose nearly 6% last month. Meanwhile the rupee- India’s currency- finally stopped its free fall and rose. 

All in all, putting these positives together with the pending BJP win in the national elections and India could be on track to grow its GDP at 8% this year and next.

Catching An Elephant

Given the prospects of better time ahead in India, investors make want to give the nation a go. After the continued drubbing that they have received, the overall Indian market currently can be had for just a P/E of 14.3. The easiest way to tap into that opportunity is through the WisdomTree India Earnings (NYSE: EPI). The ETF remains the most popular India fund with nearly a billion dollars in assets and trading volume of 4 million shares plus. That’s nearly double on bath accounts versus competitor funds like the iShares India 50 (NASDAQ:INDY) and PowerShares India (NYSE:PIN). 

The key could be EPI’s strategy of focusing on earnings and profitability, rather than just traditional market-cap weightings. That has it plowing head first into strong Indian firms like HDFC Bank (NYSE:HDB) and Tata Motors (NYSE:TTM). That focus has also resulted in EPI outperforming PIN, INDY and the iShares MSCI India (NASDAQ:INDA). EPI yields more as well at 1.51%. 

One sector area where India continues to shine is in tech. And with the global economy beginning to heat up, tech spending on IT solutions should benefit Indian firms like Wipro (NYSE:WIT) and Infosys (NASDAQ:INFY). Both have worked hard to move beyond their early “outsourcing” beginnings and are now global IT giants offering a variety of services. The pair, along with Cognizant (NASDAQ:CTSH) make ideal plays on the growth of Indian tech.

Finally, as the Indian economy grows, that growth should trickle down towards smaller firms. That could benefit the Market Vectors India Small-Cap ETF (NASDAQ:SCIF). The ETF already surged 8% when the election results were first posted.

The Bottom Line

After a few years of disappointment, change may be coming to India. A major election win could finally be the spark that will send Indian equities higher and up their potential. For investors, the time could be right to be on the merging market nation. The previous picks, along with the infrastructure-based EGShares India Infrastructure (NASDAQ:INXX) –could be ideal ways to play the nation’s return to glory.

Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.