Impact of the Global Downturn on the Indian Economy



Since the deceleration in global trade, industrial production and financial flows have been extraordinarily high. The recent global economic slowdown has taken center stage in policy debate and discussions around the world. Although its epicenter was in the developed world, particularly in the USA, its impact has been experienced in almost all regions and sectors with different degrees and dimensions. The crisis poses substantial risks to emerging market economies, operating through multiple transmission mechanisms. There are three major channels through which the impact of the global crisis has been transmitted to the rest of the world: the financial sector, exports, and exchange rates. However, the ripples of recession too are being felt in terms of reduction in exports from developing countries to developed countries, decline in remittances and investment, and increasing concern about the availability and cost of credit. The combined impact of all these factors resulted in loss of employment and reduction of income, leading to several socioeconomic–political problems. The ILO (2008) predicted that the slow or negative economic growth, combined with highly volatile food and energy prices, will erode the real wages of the world’s 1.5 billion wage earners, particularly low-wage and poorer households.


Indian Economy Income Elasticity Foreign Direct Investment Inflow Export Growth Export Sector 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. ADB. (2009). The impact of the global economic slowdown on South Asia. Manila: Asian Development Bank (by Manu Bhaskaran Centennial Asia Advisors PTE LTD).Google Scholar
  2. Government of India. (2009). Report on effect of economic slowdown on employment in India. Chandigarh: Ministry of Labor and Employment Labor Bureau.Google Scholar
  3. ILO. (2008). Global wage report 2008/09: Minimum wages and collective bargaining: Towards policy coherence. ILO: Geneva.Google Scholar
  4. Pradhan, J. P. (2009). Firm performance during global economic slowdown: A view from India (MPRA Paper No. 17145, posted 07. September 2009).Google Scholar
  5. Sahu, B. K. (2010). Growth & Poverty Nexus in India: Experiences of some backward states during post-liberalization period’. A paper presented in National Conference on ‘Recent Poverty Debate in India: Measurement, Issues and Relevance’ held at Allahabad University, Allahabad, India, 20-21, November 2010.Google Scholar
  6. UNCTAD. (2009). Impact of global slowdown on India’s exports and employment. A report prepared under UNCTAD- Govt. of India- DFID Project ‘Strategies and Preparedness for Trade and Globalization in India’.Google Scholar

Copyright information

© Springer India Pvt. Ltd. 2013

Authors and Affiliations

  1. 1.Indian Institute of Foreign TradeNew DelhiIndia

Personalised recommendations