Indian economy keeps its shine, with some red flags

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Key Points

India maintained its top position among major emerging market (EM) economies in the February edition of Mint's monthly EM tracker, buoyed by robust domestic growth and a sharp rebound in exports..

This solid standing, especially at a time when recession bells are ringing in Europe, is particularly advantageous for the Narendra Modi government as it approaches the Lok Sabha elections..

On the EM tracker, which ranks 10 countries on seven indicators, India stood out mainly due to the 8.4% GDP growth in October-December, 11.9% growth in exports, and 4% month-on-month rise in stock market capitalization..

The robust GDP growth rate along with rising profitability of corporate India led to a rally in markets," said Harsimran Sahni, executive vice-president - head treasury, Anand Rathi Global Finance..

Meanwhile, the performance of the rupee has been relatively stable in recent months, but its decline to a record low last week has caused furore in the hot election season despite Indias robust foreign exchange reserves..

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