<b>Long-Term Story</b>: Global blues can't harm India

Here is a scenario study on the global developments on India:

Scenario 1: The US economy slows down

In the case of India, given that the economy is largely domestically-driven, the impact of a 1% drop in US growth would have the smallest impact on growth when compared with other countries in the region. This takes into account the rising share of trade (including software) from less than 14% of GDP to close to 20% currently.

Examining the sectors, a few that are likely to be impacted given their dependence on exports to the US include gems and jewelry, textiles, and software.

Scenario 2: The China Factor

The 9% drop in the A-Share Shanghai Index4 on February 27, which sent ripples throughout the global equity markets, is the first time that China