The Indian economy is set to kick off the year as the favorite among emerging markets thanks to a series of positive economic developments coupled with the accelerating pace of Prime Minister Modi's reforms.
"We expect India's stock market to generally outperform emerging and developing peers in 2015," said Howie Lee, investment analyst at Phillip Futures, in a report last week. The Sensex stock index was Asia's second-best performing market in 2014, rising around 30 percent.
New Delhi is expected to post economic growth of 5.5 percent during the fiscal year ending March 2015, according to the finance ministry - a welcome sign for an economy that's seen sub-5 percent growth for two consecutive years.
"The rise of India looks unstoppable," the Center for Economics and Business Research (CEBR) said last week. In its annual World Economic League Table, the group expects India to become the Commonwealth's largest economy by 2018. In 2024, the group expects India will become the world's third largest economy from its present status as fourth-largest.
2013 marked a year of vulnerability for India as a ballooning current account deficit triggered sharp capital outflows when the Federal Reserve first broached the idea it would reduce its stimulus program.
"Call it a huge slice of luck or astute economic forecasting, but going into 2015, the problems that have plagued India for the past two years have mostly been subdued. Due to falling commodity prices, the twin terrors of current account deficit and high inflation have come under substantial control," said Howie Lee of Phillip Futures.