Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some Indian stocks to your portfolio but don't have the time or expertise to hand-pick a few, the iShares MSCI India Index ETF (INDA -0.74%) could save you a lot of trouble. Instead of trying to figure out which Indian stocks will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. This ETF, focused on Indian stocks, sports a relatively low expense ratio -- an annual fee -- of 0.67%. The fund is fairly modest in size, so if you're thinking of buying, beware of possibly large spreads between its bid and ask prices. Consider using a limit order if you want to buy in.

This Indian stocks ETF is too new to have a track record worth assessing. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why Indian stocks?
If you're drawn to China for its massive population of roughly 1.4 billion people, don't overlook India, with about 1.3 billion and a rapidly growing middle class. Adding international stocks to your portfolio is also good simply for diversification's sake, and if you're bullish on India's future, this ETF focused on Indian stocks is worth consideration.

Some Indian stocks had strong performances over the past year. Infosys (INFY -1.20%), for example, surged 34%. The information-technology and consulting specialist, also known for its outsourcing expertise, reports its earnings tomorrow. Infosys is poised to profit from a falling rupee, as that can make American competitors' services more costly in comparison. Infosys's last quarter featured an earnings miss, but solid revenue gains and a positive outlook from management. The stock offers a 1.1% dividend yield.

Many other Indian stocks didn't do quite as well over the last year, but could see their fortunes change in the coming years. Tata Motors (TTM) gained just 4%. Tata Motors is India's largest automaker, and also owns the Land Rover and Jaguar brands, which are selling well in China. The company posted strong revenue and profit gains in its last quarter, and seems rather inexpensive, to boot.

HDFC Bank (HDB -1.26%) slumped 13%. The company's revenue has roughly tripled during the past five years, and its net income has quintupled. It may not look like a screaming bargain, with its current and forward-looking P/E ratios in the mid-20s, but analysts at Zacks recently upped HDFC Bank's rating from underperform to outperform, based on its recent results and growing market share in India.

Sesa Sterlite Ltd. (NYSE: SSLT) also shed 13%. It's a subsidiary of Vedanta Resources and, until it was combined with several other Vedanta properties, it was known as Sesa Goa. Sesa Sterlite is in the business of exploring for, extracting, and/or processing oil, gas, zinc, lead, silver, copper, iron ore, aluminum, and more. Its second quarter featured record oil and gas production.

The big picture
If you're interested in adding some Indian stocks to your portfolio, consider doing so via an ETF. A well-chosen ETF can grant you instant diversification across any industry or group of companies -- and make investing in and profiting from it that much easier.