Impact on Indian economy with Lehman and Merrill Fall

Its often said when US sneezes everybody in the World catches the cold. So how come India be kept aloof with latest financial turbulence in the US economy. Indian economy will certainly be impacted by this financial crisis. Some of the sectors which will affected are :

1. Stock Market : With the Chapter 11 bankruptcy filed up by Lehman Brothers and Merrill Lynch bail out by BOA, FII have also started pulling out their money from the Indian Capital Markets. The trend will certainly continue till the financial scenario become much more stable.

2. Tourism : US citizens posed the major chunks of foreign tourists in India. With people loosing their jobs, inflation at all time high, and the improvement in US economy seems to be distant dream for everybody in US. With such kind of gloomy environment,people like to save their money rather than spending on vacation, which certainly affect the Indian Tourism Industry.

3.IT /ITeS Industry : For most of the Indian IT behemoth US is still the biggest revenue grosser, of which BFSI holds the greatest pie. As 9 out of 10 major Investment banks already posed huge amount of looses, which resulted in the cut of their IT budget, the end result no new bidding , even existing IT project are on hold or in pipeline, such kind of negative sentiments led to gloomy atmosphere in the IT space of the country.

4. Finance Industry : With the globalization of Indian economy, there is not only inflows of capital but outflows also. Some of the major banks in India did had some exposure in this ailing financial units. For e.g. India largest private bank ICICI Bank hold a 80million$ positions in Lehman Bonds.

5. Education : Even the Indian education system did not keep itself aloof from the recent fall of these financial institutions. The students of the Indian premier management Institutes IIM and ISB, who already accepted Pre-Placement Offers (PPO) from Lehman Brothers and Merill Lynch, now find the offers useless and have to look for different oppurtunity elsewhere.

Thanks&Regards,
Mohit