News Analysis

Chandreyee Mukherjee
M1
Roll-151701004

Chinas Economic Slowdown had

adverse effect on India: RBI Guv.
CHINAS PAIN

of economic
slowdown is Indias pain too. RBI
Governor Raghuram Rajan said
contradicting government assertion that
India will not be affected by deceleration
of Chinese economy.

The Chinese slowdown is a concern for

the whole world. There is a lower demand
for some of our exports to China. But
indirectly too many of the countries are
not exporting to China as much as they
did and they buying less from us.
-Rajan said in an interview with Hong
Kong based south China morning past.

My Interpretation
How India can get benefitted:

Indias firm are less integrated with companies in China and India
do not sell much in global market.
According to Economist Oliver White Indias export accounted for
a relatively small proposition of its GDP just for 20%.
India also gaining profit from cheaper commodity prices which
have dropped as a result of Chinese slowdown.
As a importer of oil minerals and other commodities India will be
able to buy at cheaper price.

Possible Outcomes
India is Not the NEW CHINA

Vastly bigger size of Chinas Economy means that it will continue

to contribute far more than Indias to global GDP, though China
is growing in a slow rate.
Although Chinese population is almost same as Indias
population still Chinese GDP is $10.3 trillion where Indias only
$2 trillion.
According to Shilan Shah, an Indian Economist at UK based
capital Economics explain that even if China grows at 5%/annum
then also it will be able to contribute 0.8-0.9% each year to
global GDP.

Long Term Forecast

However economists say things
might change in long run. India
may projected to grow more
rapidly than China in next 2-3
decades.
Indias economy which will soon
boast the worlds largest workforce
is also expected to account for a
rising star of global GDP.