What is the Fragile Five, a term that PM Modi used to highlight India's growth in the last 12 years in his I-Day speech?

Prime Minister Narendra Modi on Saturday delivered his 13th consecutive Independence Day address on the occasion of the country's 80th Independence Day, highlighting India's growth and outlining the way forward for Viksit Bharat 2047.

Speaking from the ramparts of the Red Fort, PM Modi said India had moved from being part of the 'Fragile Five' to becoming the world's fastest-growing major economy over the past 12 years, news agency PTI reported.

What is the Fragile Five?

In 2013, global investment bank Morgan Stanley introduced the term 'Fragile Five' to describe five emerging economies that were considered particularly vulnerable to external financial pressures. India was included in the group alongside Brazil, Indonesia, South Africa and Turkey.

A BBC report from the time explained that while scaling back cheap cash injections and winding down the Federal Reserve's economic stimulus could indicate a return to normal conditions for the US economy, such a move could have significant implications for five major emerging economies.

In simple terms, the term referred to emerging markets that relied heavily on foreign investment and were vulnerable to sudden changes in global capital flows.

In a research note published in August 2013, Morgan Stanley wrote, "High inflation, weakening growth, large external deficits, and in some cases exposure to the China slowdown, and high dependence on fixed income inflows leave these currencies vulnerable." The investment bank further noted, "We've highlighted Morgan Stanley's greatest concerns for each of the 'Fragile Five.'"

Reports at the time said India was included in the group due to factors such as high inflation, a widening current account deficit, a weakening rupee and its considerable reliance on foreign capital.

India exits Fragile Five

Shortly after India was added to the grouping, the country exited it in 2014, with the International Monetary Fund (IMF) raising its growth forecast for India. Speaking to The Hindu, IMF India Mission Chief Paul A Cashin said, "India is the odd man out from the emerging markets and BRICS economies that were being called the Fragile Five last year… But the story for India changed quickly… India is better prepared for shocks today than when the U.S. Fed’s tapering started, and more prepared than other emerging markets."

Reports suggest that PM Modi and the Bharatiya Janata Party (BJP) have often referred to the "Fragile Five" label to draw a striking contrast between the country's economic position during the UPA era and its subsequent growth since 2014.

The reference to India's transformation from the 'Fragile Five' came as PM Modi used his Independence Day address to highlight the country's economic progress and outline his vision for the years ahead.

Viksit Bharat, self-reliance take centre stage in Modi's address

During his address, PM Modi also urged people to dream big to make 'Viksit Bharat 2047' a reality. He said, "Small dreams are not sufficient anymore… we should dream big… India has a big dream to become 'Viksit Bharat' by 2047. When the world's most populous nation resolves to become developed, the world will look at us differently."

He also urged the country to become self-reliant and reduce its dependence on other countries, citing ongoing geopolitical tensions as a reason to strengthen domestic capabilities.

(with PTI inputs)