India's GDP growth has averaged 7.3% in 2015 (higher than Chinese growth around 7%) and industrial production rose 10% y/y in October. India continues to be well positioned for robust growth in 2016 and 2017. (1) It is benefiting substantially from the lower oil price, (2) improving external and domestic balances have left room to ease both fiscal and monetary policy and (3) it has a strong reform-oriented government progressing with building a stronger role for markets, cutting red tape and opening up the economy. If this continues, there is potential for high growth rates for many years.  

The general election in 2014 gave the main opposition party BJP an outright majority in the Lower House. Hence, compared with the past two decades, India has a relatively strong government with substantial political room to accelerate economic reforms. India also has a highly credible central bank governor in Raghuram Rajan, former Chief Economist at the IMF.  

India's current account deficit has declined markedly to about 2% of GDP and should decline further due to the sharp decline in the crude oil price. India is no longer regard as among the 'fragile' emerging markets as imbalances have been reduced markedly over the past two years.