Are Indian Businesses decoupled from the Rest of the World?
It is said that humans usually fear that thing the most which cannot be controlled. In this age of globalization, where national boundaries have become blurred and economies in different parts of the world are in turmoil, there is an imminent need for India to evaluate how vulnerable it is to the ups and downs of other economies. No action is without reaction, and the ripples, in some cases, may be far-reaching.
Decoupling refers to a decrease in correlation. The concept that the world’s emerging markets no longer need to depend on demand from U.S. to drive their economic growth is an example of economic decoupling. Though emerging markets did depend on the U.S. economy, many analysts now argue that some of them like India, China and Brazil, now have become sizable markets on their own for goods and services. The argument for decoupling indicates that these economies would be able to withstand a faltering U.S. economy.