How will the US recession affect India?

dhiren_te

Par 100 posts (V.I.P)
Cause we ( india) have confined ourselves to USA for all types of business/trade.

Majority of BPO/KPO/IT business of India is from US.besides, the majority of FIIs investing ( or playing) in Indian stock markets are USA.

A lot of Indians working in US send money back home ( india) .

For everything-like Pizza ,burger, multiplex, malls ,clothing etc we blindly follow americans.

Any slowdown in US economy will effect them and hence will effect we Indians and our Indian companies.

Even if the slowdown of US economy may not effect us directly, it does have psycological impact on us.

To conclude, if one is dependant on only one person for all its needs, any effect on the 2nd one is blound to effect the first one.Its time to get out of the USA umbrella which is leaking now....

What do you feel guys....?
 

odin

New member
There would obviously be a positive correlation between US economy and Indian economy. Someone has rightly said "When the Wall Street sneezes, the rest of the world catches a cold ".
The US comprises of 30% of the world GDP and if there is a slowdown in that 30%, surely other markets are bound to be affected. Moreover, since India is majorly dependent on US for its trade surplus, this would hurt India more, since its exports to its largest trading partner would decrease and hence the only major source of dollar.
Profit margins of companies would be further squeezed even though the rupee is likely to depreciate against the dollar. India too would be staring into a recession if our domestic consumption shrinks at the same time too.
 

mehul jain

New member
its right wat u say abt investment and all but the piza..... is italian dish and those dont effect the countries economy
u say we follow blindly americans but 2 then we buy chinese products more
 

deepakraam

Par 100 posts (V.I.P)
The "decoupling theory" was proved false a couple of weeks back.US is a largest economy in the world and it is trading with almost all countries in the world.So any effect on its economy will affect the world.Our banking system is overall very good.So we didn't face any mortgage related issues.Even our IT companies are changing their focus to European countries to reduce their exposure to the US markets.Indian Govt is trying to negotiate with other countries and increase our exports.Even US Govt and Fed reserve are trying their best to avoid recession and control the inflation in US.But this all will take sometime to settle.Till then we have to bear the brunt.

-Deepak
 

RC1327

Par 100 posts (V.I.P)
When the Wall Street sneezes, the rest of the world catches a cold QUOTING ODIN well surely because of globalisation the ecomies have become integrated so anyhing big happens in us it will surely have an impact on others like india
 

ameetdegreat

New member
The "decoupling theory" was proved false a couple of weeks back.US is a largest economy in the world and it is trading with almost all countries in the world.So any effect on its economy will affect the world.Our banking system is overall very good.So we didn't face any mortgage related issues.
 

chinks87

New member
Possibly the most challenging concept in marketing deals with understanding why buyers do what they do (or don’t do). But such knowledge is critical for marketers since having a strong understanding of buyer behavior will help shed light on what is important to the customer and also suggest the important influences on customer decision-making. Using this information, marketers can create marketing programs that they believe will be of interest to customers. As you might guess, factors affecting how customers make decisions are extremely complex. Buyer behavior is deeply rooted in psychology with dashes of sociology thrown in just to make things more interesting. Since every person in the world is different, it is impossible to have simple rules that explain how buying decisions are made.
The primary objective of this research is to examine the importance of different factors affecting consumer’s motives related to mobile phone purchasing. Consumer choice behaviour has some important prevailing conditions that must be taken into account while studying choice. In the light of the classical problem solving buying behaviour, consumers engage in information search before making the actual choice. Consumer decision making process is usually guided by already formed preferences for a particular alternative. This means that consumers are likely to make the choice between alternatives based on limited information search activity.
Understanding the stages of the buying decision process helps the marketer better understand consumer behavior and thus helps to align or direct their marketing strategies towards the target customers. They can be in touch with the consumers at every step in this process thus finally ensuring that the consumers purchase their own product. Thus, it is important to first look into the stages of the buying decision process before proceeding to understand the different factors influencing purchase decision.
 

ruhi28

Par 100 posts (V.I.P)
I believe that if americans catch cold ,we indians will sneeze, so they r goin 2 affect us no matter what's being said about decoupling.
 

cool_don

New member
The US comprises of 30% of the world GDP and if there is a slowdown in that 30%, surely other markets are bound to be affected. Moreover, since India is majorly dependent on US for its trade surplus, this would hurt India more, since its exports to its largest trading partner would decrease and hence the only major source of dollar.
Profit margins of companies would be further squeezed even though the rupee is likely to depreciate against the dollar. India too would be staring into a recession if our domestic consumption shrinks at the same time too.
 

akashkhetpal_86

Par 100 posts (V.I.P)
it can eefct in both good n bad ways, good is that because of recession in america & Canada, many firms are transferring their outlets in India in search of cheap labour... so more employment opportunities... the bad effect would be many mnc's closing their operations in india & layin off jobs.. plus less FDI's etc could be the bad & adverse effect...
 
The global financial and economic crisis keeps getting worse. A couple of weeks back the giant Citibank had to be bailed out with several hundred billion dollars in cash and guarantees from the US authorities ("Citi never sleeps"�but apparently its management dozed off during some crucial decisions last year).

Last week America reported November job losses of more than 530,000, the biggest single month figure since 1974, taking the US unemployment rate to 6.7 percent, the highest in 15 years.
The global financial and economic crisis keeps getting worse. A couple of weeks back the giant Citibank had to be bailed out with several hundred billion dollars in cash and guarantees from the US authorities ("Citi never sleeps"�but apparently its management dozed off during some crucial decisions last year).

Last week America reported November job losses of more than 530,000, the biggest single month figure since 1974, taking the US unemployment rate to 6.7 percent, the highest in 15 years.
 

thewaytopuneet

New member
66% of US Economy is consumption driven... And US also is a major consumer of natural resources ( about 25%)
So any recession in US, will certainly impact India because we are exporting to US with things like Gems, textiles etc....
As the demand there will be low so obviously production here will be less...
and hence in this way we will be getting affected.
 

tamz1

New member
it already affected...

by top notch b-schools giving up and saying they are unable to even provide summer placements leave alone final placements
 

anu.bhat.k

New member
ever heard of the butterfly effect.... well simple... now tat this world is a global village .... even the minutest change in any part of the world can be a big issue elsewhere.... recession in US wud only mean the same in India, with a greater impact
 

raaz.ram

New member
But if we improve our regulatory bodies and make the rules transparent & more secure then we may think that recession will not affect India.
 

jn85739

New member
Those who have thought that Indian economy is immuned to the global recessionary effects were proved to have grossly mistaken. Indian economy had been facing a deep slowdown soon after US mortgage losses were unfolded and western economies went into recession. Slowdown has reached India by the routes of exports, FDI, FIIs portfolio investments etc. Flight of FII money from the Indian stock markets had crashed our stock indices. Fall in foreign demand of Indian commodities has adversely affected the export oriented industries. Many have shut their shops which resulted in massive job losses. The ripple effect of economic slowdown has affected every industry. The GDP growth forecast has been dragged down to 5-6 percent as compared to 9 percent of previous year. Entrepreneur sentiment has been negatively impacted. Banks have become over cautious is lending. They are not ready to lower their lending rates despite RBI's softening of key macroeconomic rates.
India is still better positioned in camparison to developed US, EU and Asian economies due to its comparatively less dependence on exports and strong domestic demand. The easing of inflation number to 3.92% will give further room to the central bank to lower the key rates which will help flow funds to the productive sectors of the economy. The next govt will probably take appropriate fiscal measures to take out our economy from the grip of recession.
 
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