After the world credit agencies downgraded US’s credit ratings, it is feared that India's exports may get affected in the wake of a slowdown in major economies across the world led by the US.
A survey by the Federation of Indian Chambers of Commerce and Industry (FICCI) in the aftermath of the US economic downgrade revealed that there would be a slip in the consumption demand overseas.
"A majority of the respondents feel that the current trend of high export growth will not be sustained in the months ahead. There is significant apprehension about the global economic recovery, which in turn is expected to impinge on consumption demand," said a spokesperson from FICCI.
"The sovereign debt crisis in Euro zone, weakness in the US and moderation of economic activity in China may significantly affect the level of external demand. This could be detrimental to the recently gained momentum in India's exports performance as these economies are India's major trading partners," it added.
Therefore, the recent slowdown in key economies which are important export destinations for India, is not good news. Add to that the rising cost of credit because of incessant rate hikes by the Reserve Bank of India. Moreover, the outlook for exports is also tempered on account of factors such as rising interest rates in India, rising raw material prices and rising cost