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Has India decoupled from the World Markets ?

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India has very low exposure to the current European debt crisis. The reasons for that are:

  1. India’s export to GDP ratio is much lower than that of other Asian countries,so a slowdown in world trade due to European slowdown has little affect
  2. India’s financial sector has almost no linkages to the sovereign debt of the affected Club Med countries
  3. India has very few companies that are dependent on exports to Europe,can’t think of a single large cap

That said I don’t think India can remain unaffected or decoupled from the other world  markets. The reasons are that capital is globalized and I don’t think India’s relative valuation can remain too much greater than the other world markets. Also foreign capital inflows will slow if not reverse as investors choose to invest in safe haven assets.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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