India might see better growth prospects mainly on account of expectations of significant progress on project approvals as well as the central bank maintaining a delicate balance between inflation and growth, says a Citigroup report.
The report has been prepared after meeting more than 150 institutional investors across all geographies.
"The key takeaway was that, in contrast to trends in June/July, (about) 70 per cent of investors felt that India was in a better position to face the 'actual' taper," it said.
In recent times, there have been rising concerns that withdrawal of easy money policy by the US Federal Reserve could have adverse impact on emerging markets including India.
According to the report, many institutional investors felt that India no longer needed to be classified under the 'Fragile 5'.
"The change in sentiment (relatively more optimistic in US/Europe than Asia)
was due to positive external sector dynamics, emerging green shoots on investments and the possibility of a positive election outcome," it said.
'Fragile 5' refers to five countries - Brazil, Indonesia, India, Turkey and South Africa.
As per the report, there is possibility of upside surprises in India's growth.
"While a sub 5 per cent growth for FY 14 is priced in, what came as a surprise was that investors felt our 5.6 per cent estimate of FY 15 could be overshot due to significant progress on project approvals, though everyone stressed implementation is key and RBI effectively maintaining the delicate balance between inflation and growth...", it said.
Further, the report said that 'Fragile 5' all have elections in 2014, "but what distinguishes India is the possibility of a decisive political outcome".
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The report has been prepared after meeting more than 150 institutional investors across all geographies.