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Euro crisis to impact Indian export growth – CARE

Credit rating agency CARE said that India's exports growth is likely to be hit in the coming months due to eurozone crisis.

CARE in a report titled 'Impact of Euro crisis and global slowdown on India' said that "Though India is primarily a domestic economy, India's exports are positively linked to the global economic growth. This is likely to adversely impact India's export growth in the coming months.”

However, it said the growth will be only marginally affected by the slowdown in the euro region debt-stricken countries as our exposure is low.

It said that "Average elasticity between India's exports and the advanced nations or the euro region's GDP is 0.18.”

It is observed that in 2010-11, India's exports to the European region and US moderated. However, the country's exports to the Asian and the African region, which have a greater share in India's exports, grew during this period.

The report also said that the FDI has not been significantly affected by the crisis while the FIIs are showing outflow in the last couple of months.

It, however, noted that the software services and other export oriented sectors would benefit from the rupee depreciation.