India resorting to domestic demand to tide over US crisis
India will be able to tide over the financial crisis emerging from a likely US double dip recession and downgrade of its sovereign debt rating as the Indian economy's growth was driven by domestic demand, Finance Minister Pranab Mukherjee said on Thursday.
"It is too premature to say what will be the final shape of the US downgrade. But there is no doubt that our IT industry may be affected," Mukherjee said during a discussion in the Rajya Sabha.
"We generated domestic demand which other economies do not have," Mukherjee said referring to the 6.8 percent growth India logged during the financial crisis year of 2008-09.
The finance minister, however, said exports could get hit this time around as well, if demand slowed down in the US and Europe further. Japan, US and Europe constitute a majority of the export destinations of India.
"Some export diversification has taken place. But I don't know to what extent."