India's latest trade figures showed a tenth straight month of declining exports, further supporting the notion that India and its BRIC peers are continuing to feel the sting of economic contagion. India has also been the beneficiary of weaker resource prices which have put a ceiling on import prices and bloated its trade surplus in recent months, much like its BRIC counterparts. Despite these concerns raised by the nation's falling exports and the uncertainty surrounding the nation's drought the country has seen its economic prospects improve markedly in short order.

As Indian export markets eroded over the past year domestic demand for imported resources declined with even greater fervor. Frozen credit markets meant no financing for infrastructure and construction projects. This led to rising stockpiles of resources combined with widespread cancellations. In the aftermath gold imports are down 51% for the first seven months of the year along with those of crude oil and base metals. This has driven India's trade surplus higher and added nearly a quarter of a trillion dollars to India's foreign reserves.

With the stabilization of the world's economy has come renewed activity in the Indian marketplace. Private projects have recommenced alongside public ones, with the Indian Government committing USD$4 Billion as part of its second stimulus package. Meanwhile, the central bank has cut 425 basis points off short term rates and the government has waved farm loans, decreased factory taxes, and directed stimulus money at export financing. All of these forces are combining to overwhelm the decidedly negative economic outlook which persisted in India as recently as February .

Rates stand at 4.75%, giving the Indian government the latitude to cut rates further to manage the Rupee's exchange rate and make exports competitive. Further stimulus packages have been rumored and previously dormant public works projects are back on line. India's growing reserves give them increased leverage in trade negotiations both regionally and globally. Development of Indian consumer markets has proceeded at break-neck speed rivaling only that of Brazil and China.

Even if an improvement in exports is not immediately in the cards, the market is beginning to price in that prospect more aggressively with Wisdom Tree's India ETF, EPI, up 60% YTD. While this is good for those who have owned it since then, it represents a caution sign for those looking invest in India. All markets are likely to participate in a U.S. market correction, but India's market is in a good position to outperform.

A looming equities market correction is likely to bring down Indian companies to more attractive levels just as the underlying fundamentals of the economy seem to be turning. The improved outlook for India coinciding with market selling provides an opportunity for investors to enter the market at lower prices. General exposure to India comes best through EPI, growth sectors like telecom will benefit most and no company is more critical in this market than Tata Communications (TCL).