While the MSCI Emerging Markets Index is up 6 percent in 2014, India's market benchmark, the S&P BSE SENSEX, has gained nearly 21 percent year-to-date, and closed Tuesday at a record 25,583.69. That's a better return than 90 percent of the stocks in the S&P 500. On top of that, the Indian rupee has also appreciated by 4.5 percent so far this year.
Six out of the top 13 bestperforming ETFs in 2014 are those focused on Indian companies, according to Morningstar data. That includes the top performer, Direxion Daily India Bull 3X Shares (INDL), which has seen 83 percent returns so far this year by holding a highlyleveraged portfolio of Indian stocks.
Shares in the world's 10th largest economy really got a boost in the middle of last month when Narendra Modi was elected prime minister of India. Modi is expected to implement more pro-business policies than previous Indian governments.
Gina Sanchez, founder of Chantico Global, believes that although Indian stocks may have rallied, they're still fairly priced.
"If you look at the P/E of the MSCI India Index, it really isn't particularly overpriced right now," said Sanchez, a CNBC contributor. "We're trading at 15 times. That's about in line with long-term averages."
However, expectations that Modi will be able to implement changes right away to India's tough business atmosphere may be a little too optimistic, according to Sanchez.
"These kinds of reforms that result in the business-friendly environment becoming actual earnings and corporate growth take a long time," Sanchez said. "That's where investors might be a little disappointed."
Labor laws, tax issues, and infrastructure problems such as its power grid need to be addressed, said Sanchez. "Those are all things that India has to get over before you can really see a boom in Indian equities," she said. "While I do think that they're moving in the right direction, it does take time."
Meanwhile, Ari Wald, head of technical analysis at Oppenheimer & Co., is optimistic about the Indian markets based on the chart of the SENSEX.
"I think there's some juice left," Wald said. He views last year's breakout above its 2008 and 2010 peaks around the 20,000 level to be of important technical significance.
"When you get a big breakout like that, you really tend to see momentum continue to accelerate higher," Wald said. "It indicates new demand for the SENSEX."
But Wald also notes that the SENSEX has, until recently, actually underperformed the U.S. benchmark S&P 500 index. That changed with the start of the rally earlier this year.
The "SENSEX has actually underperformed versus the S&P 500 by 26 percent since 2010," said Wald, looking at a chart of the relative price of the SENSEX versus the S&P 500. "Now you're starting to reverse that downtrend."
Wald also sees the SENSEX as having recently broken above a four-year downtrend relative to the S&P 500. Thus, not only is Wald optimistic on the absolute performance of the SENSEX but "I see some ample upside opportunities relative to U.S. equities as well," he said.
To see the full discussion on the S&P BSE SENSEX, with Sanchez on the fundamentals and Wald on the technicals, watch the above video.