India is starting to happen, investors.

The world's second most populous nation -- largely ignored for its lackluster growth, rampant poverty, and inadequate infrastructure -- is shaping up to be the next hotbed of international investing.

The Reserve Bank of India cut its rates this morning. Economists were generally expecting a 25 basis-point cut, but they got a heartier 50 basis points instead. After growing its economy at a 6.1% clip in the final quarter of last year -- a two-year low, but clearly ahead of where most developed nations are at this point -- India doesn't want to take any chances.

India has its problems, of course. However, the challenges are different than the restrictive worries that often keep investors of Chinese equities up at night. India isn't threatening to shut down the Internet when the news isn't favorable. If anything, India's Draft National Telecom Policy is taking aggressive steps to broaden broadband access throughout the country.

Rupee slippers
After an uninspiring 2011, investors are starting to pay attention. Dreyfus India -- a mutual fund that naturally invests in companies in India -- has gained more than 30% this year.

Let's dig into some of the more intriguing tech and consumer-facing companies in India.

  • Tata Motors (NYSE: TTM), India's leading automaker, may not be a household name stateside outside of its Jaguar Land Rover arm, but the real story here is Tata's smaller -- and typically far cheaper -- automobiles. Tata is the world's third-largest automaker in the small-car market, and worldwide sales soared 26% last month.
  • Rediff.com (Nasdaq: REDF) is a company that I've been bearish on in recent years. The Internet portal operator is not profitable and generating less than $2 million in monthly revenue. However, the stock is trading for a little more than a third of last year's unjustified peak. Rediff still may not be a bargain, but it will be a winner if India's pro-Internet initiatives bear fruit.
  • Sify (Nasdaq: SIFY) provides connectivity, hosting, and other IT-related services throughout India. Last month found Sify unloading its stake in the unfortunate MF Global India venture. Like Rediff, Sify isn't where it needs to be fundamentally -- and its stock has also fallen by nearly two-thirds since peaking last year.
  • MakeMyTrip (Nasdaq: MMYT) watches over India's most popular travel portal. MakeMyTrip is both growing and profitable, making it a relative dot-com darling when pitted against Rediff and Sify. The stock isn't exactly cheap, but check out the growth. Analysts see MakeMyTrip earning $0.20 a share in the fiscal year that began earlier this month, more than doubling to $0.42 a share next year.

Betting on the lot
Instead of singling out individual winners -- and there aren't that many that trade on stateside exchanges -- investors can buy into a basket of stocks through mutual funds.

There's certainly nothing wrong with Dreyfus India, but the smarter bet may be India Fund (NYSE: IFN).

As a closed-end fund, India Fund trades throughout the day on the New York Stock Exchange. Most closed-end equity funds actually trade at a discount to their net asset values, and India Fund started off the week at a nearly 10% discount.

India Fund hasn't kept up with Dreyfus India this year, but it's a smart and discounted play on a promising country that's starting to come into its own.

It's too early to give up on China. Warts and all, some of the better growth stocks there are trading at healthy discounts to their heady growth rates. However, it's also a good time to begin delving into the mostly forgotten opportunities of buying into India.

It's a small, small world
 Motley Fool's top stock for 2012 is also an international play, though it's far away from India. If you want to learn more, the report is free -- like this article -- but it won't be around forever, so check it out now.