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In 2013 it was “taper tantrums” when there was capital flight and currency devaluations experienced by emerging economies. In 2025-26 it is Trump tantrums, playing out with a similar adverse effect. India was at the receiving end in 2013. It is at the receiving end now, as the Economic Survey admits.

In 2013, India was among the ‘fragile five’ economies besides Brazil, Indonesia, South Africa and Turkey which bore the brunt of taper tantrums which were seen as a collective market panic that occurred after the US Federal Reserve (under Ben Bernanke) suggested it would begin “tapering” its quantitative easing programme – meaning it would reduce the amount of money it was pumping into the economy.

As the US interest rates rose, global investors pulled their money out of emerging markets like India to seek safer, higher returns in the US.

The Trump tantrums began in 2025 with a trade/tariff war declared on the rest of the world and continues in 2026 causing  huge disruptions in trade and investment flows.

Interestingly, India seems to have suffered the most in both 2013 and 2025-26. In 2013, Indian currency sharply depreciated 15% to 20% in a short period and there were substantial outflows from the stock market. The RBI sold dollars to defend the rupee and India’s forex reserves fell to less than $300 billion, covering about seven months’ imports.

In 2025-26, the RBI has........

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