Modi touts India's exit from Fragile Five

On India's 80th Independence Day (August 15), Prime Minister Narendra Modi delivered a speech from the Red Fort highlighting India's economic transformation over the past 12 years. He noted that India was once part of the 'Fragile Five' economies, a term coined by Morgan Stanley in 2013 for emerging markets vulnerable to external shocks, and has since become the world's fastest-growing major economy. Modi credited the collective efforts of 140 crore citizens and contrasted the current situation with the Congress-led UPA era. The 'Fragile Five' grouping included India, Brazil, Indonesia, South Africa, and Turkey, and India's inclusion was due to high inflation, a widening current account deficit (5.1% of GDP in 2012), a falling rupee, and dependence on foreign capital. The trigger was the US United States — Federal Reserve's taper tantrum in 2013. India exited the grouping in 2014 after external balances improved and forex reserves strengthened, with the IMF noting a sharp macroeconomic turnaround. Experts credited then RBI Governor Raghuram Rajan for stabilizing the economy. India has since surpassed Japan to become the world's fourth-largest economy.