The Effect of Euro Crisis on India

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Effect of euro crisis on India
EURO CRISIS: The European debt crisis is the shorthand term for Europe’s struggle to pay the debts it has built up in recent decades. Five of the region’s countries – Greece, Portugal, Ireland, Italy, and Spain – have, to varying degrees, failed to generate enough economic growth to make their ability to pay back bondholders the guarantee it was intended to be. Although these five were seen as being the countries in immediate danger of a possible default, the crisis has far-reaching consequences that extend beyond their borders to the world as a whole.
As the world braces for a probable Greek exit from the Eurozone as part of the latest development in the Eurozone sovereign debt crisis, it is prudent to
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It is fiscal mismanagement that has spelt trouble for Europe. It is imperative that we draw the right lessons from this. We will tide over small crises but if we don't cut our coat according to our cloth, we may be in for bigger trouble.
When industry lobby groups from Assocham to Ficci were seeking policies in a meeting with commerce minister Anand Sharma on June 1 to counter a possible full-blown crisis in eurozone, a lone voice said it may even turn out to be an opportunity.
It is anybody's guess what will be the shape of global trade if banks in the continent and the eurozone blow up, but Indian exporters may be better positioned than a few years ago to move on to other growing markets in Africa and Asia, which the Europeans dominate now.
"The Indian government has introduced focused market schemes (special incentives) to diversify exports. So the crisis in Europe should be seen as an opportunity for India to break into the markets where they export," says Ramu Deora, chairman, All India Shippers Council.

If the eurozone crisis is not averted, India which has about a sixth of its total exports to the European Union, will face unemployment in the lower income category, such as textiles, one of the biggest employers.
Textiles, including readymade garments, account for about a fifth of the total exports to Europe.
The eurozone crisis has eliminated the benefits of a weak rupee, which is down 20%
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