Greek crisis not to impact India, says Centre

“It (Greek debt crisis) will have minimal impact on our economy. It will have virtually very little effect on country’s export,” he told newspersons at the sidelines of a conference on banking organized by Assocham here.

“As far as overall India economy is concerned, the impact will be very minimal. In fact, in the short run the Greek debt crisis might help us in terms of India being regarded as a relatively safer place to park funds,” he said.

Greece crisis may have some ripple effect on the European economy, but it would not have a major impact on the international financial community, he noted.

Exports face risk
However, Chawla admitted that India’s exports in short term to European Union could face some problem due to ongoing financial crisis facing Greece.
In the long run, however, the impact would be negligible as India has faced bigger crisis of larger volumes without letting it’s economy shrink beyond a point, he said adding the current crisis of Europe was going to be a temporary affair.
Asked about possible impact of Greek debt crisis on inflow of capital into the country through FII routes, Chawla said the domestic capital market would be able to absorb the off shoot of crisis.

He expressed confidence that FIIs investments in Indian economy would continue to grow in coming years.In response to a query he said the government was looking at raising the FII investment limit in debt. Currently the FII investment cap in both government and corporate debt is pegged at 5 billion dollars and 15 billion dollars respectively. On growth prospect he said Indian economy would grow at anticipated rate of over 8 per cent in the current fiscal despite crisis in some of overseas economies like that of Greece.