Indian Prime Minister Narendra Modi. Source: Wikipedia, courtesy Narendra Modi.

India's stock market has been a strong performer in recent years, with Prime Minister Narendra Modi ushering in a new era of economic opportunity for the subcontinent. Yet India isn't immune to the stresses that have plagued emerging market countries across the world, and although the BSE Sensex (NYSEINDEX: ^BSESN) has held up reasonably well recently, some wonder whether the Indian stock market can continue to press forward. As Modi visits the U.S. this week, let's take a look at how India is faring.

Watching Indian stocks
India's stock market was closed on Friday for the Eid holiday, but for the week, the Sensex fell 355 points, or about 1.4%. Weakness in the industrial and materials sector worsened the mood among investors during the week, with automaker Tata Motors (TTM) leading the market down with a 7.5% drop in local-currency terms, while conglomerate Reliance Industries also posted a considerable 6% decline. Not all stocks fell, though, with outsourcing and consulting giant Infosys (INFY -0.35%) picking up more than 3% on the week.

Market participants generally pointed to troubling signs of slowing growth in China for the week's decline. India has also traditionally been susceptible to market movements in Europe and the U.S. as well as elsewhere in Asia, and so the moves that international stock investors saw around the world bore themselves out on the subcontinent as well.

Within India, though, the emerging-market nation is looking at many of the same potential strategies that its peers are considering. Many expect the Reserve Bank of India to cut interest rates in the near future, with the hope that doing so can spur more Indian businesses into making expansionary plans. Yet inflation remains a troubling component of Indian life, especially with weakness in the rupee currency making it more expensive to import goods from overseas. All told, the central bank likely has additional room to make future rate cuts if economic conditions warrant.

Modi is visiting the U.S. with the goal of trying to build on an already solid relationship between the two countries. Beyond appearing in New York before the United Nations, Modi will visit California's high-tech Silicon Valley. Given India's own prowess in technology, looking at the West Coast is a good starting point for India to broaden its ties to the U.S., and to strengthen his country's ties with its ally across the Pacific. In turn, if India wants to avoid the same troubles that China has had, fostering its much-better relationship with America is a logical step in demonstrating India's competitive advantage. If those efforts are successful, then India might well tap into U.S. strength and avoid the full brunt of what China's stock market has already gone through.