Expecting Indian economy to continue to improve, top banker Chanda Kochhar today said India is in a "sweet spot" amid the global economy witnessing a low-growth and low-inflation environment.

The end of ultra-loose monetary policy and the divergence between central banks in the United States and Europe are contributing to recent volatility in financial markets, top bankers at the World Economic Forum in Davos said.

Reserve Bank Governor Raghuram Rajan on Wednesday said that "we are in a world of make believe," and wondered "what exactly are the fundamentals?"