Will Greece debt crisis impact India?
The rejection a Greek government call to extend its bailout by EU finance ministers has deepened gloom in the Eurozone. If Greece fails to repay the International Monetary Fund (IMF) 1.6 billion euro, Greece could risk leaving the euro.
Since the European Union economy with 28 countries is India’s largest trading partner, a lot of concerns have been raised. It is possible that the Indian markets in the short term may witness capital outflows but the crisis does not have a direct impact on India since India’s exposure to these markets is limited. India’s reliance on foreign funding is also low for the region as the Central Bank’s strong foreign currency reserves built in the run up to a scare of the balance of payments scenario in 2013 have helped strengthen the economy. With the Indian economy fundamentally strong and resilient, India in 2015 is in a much better position to withstand the magnitude of the crisis in Eurozone, thereby reducing any kind of panic and chaos which could otherwise have deterred investors.