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In its first fiscal quarter of 2011, ending June 30, 2010, India posted GDP growth of 8.8%, the country’s highest growth rate in 3 years. Manufacturing grew a whopping 12.4%, compared with 3.8% growth the previous fiscal year. The government’s finance minister estimated that full-year growth for fiscal 2011 would be 8.5%-8.75%. Only China is growing faster than India.  The robust level of growth in India has not escaped the notice of FedEx Corp. (NYSE: FDX), which has announced the acquisition of a privately-held Indian logistics, distribution, and delivery firm for an undisclosed amount. The company expects the deal to close by the end of February 2011.

In its latest Form 10-Q filing, FedEx noted a jump of 10% in average daily package volume in its international domestic delivery business, which includes all but the company’s US business. That makes it impossible to tease out India’s share of that business, but the company noted that the increased package volume was particularly strong in Asia during its first fiscal quarter of 2011, which ended in August.

Competitor United Parcel Service Inc. (NYSE: UPS) also noted a 40% increase in export volume shipments in Asia during its second fiscal quarter of 2010, ending in June. For UPS, international average daily package volume grew by 24% on domestic deliveries and 14.5% on export deliveries in the quarter. Like FedEx, UPS doesn’t break out shipments by individual country.

Although FedEx sports a market cap less than half that of UPS, the two companies do about the same amount of business internationally. FedEx reported first quarter 2011 revenue from international shipments of about $2.6 billion. UPS reported second quarter 2010 revenue from international shipping of $2.77 billion. FedEx could well have stolen a march on UPS with this acquisition. It shouldn’t be a big surprise to see the positions flip once the FedEx acquisition is completed.

Interest in India and its booming economy is sure to heat up as the US and China continue to wage a clandestine currency battle. There are two ETFs comprised of Indian stocks: PowerShares India (NYSE: PIN) and Wisdom Tree India Earnings Fund (NYSE: EPI). Both funds hold more than 10% of their assets in Reliance Industries Ltd., and the next two largest holdings are Infosys Technologies Ltd. (NASDAQ: INFY) and Oil & Natural Gas Corp. Ltd., or ONGC.

Both FedEx and UPS are down slightly today, ahead of the announcement from the US Federal Reserve on another round of quantitative easing.

Paul Ausick