Impact of US Rating Downgrade on India: Some Reactions

  • Cost of borrowing for the US may go up by a few percentage points. But that would not really affect India. Dollar still remains dominant and potent currency in the world(Statement of Pratip Chaudhuri, SBI CHAIRMAN)
  • I see the US downgrade, and indeed, the continued global slowdown, as signs of a structural shift of the epicentre of economic activities towards the east. Both short and long-term investment flows into India could accelerate, provided we don’t continue to shoot ourselves in the foot, politically speaking (Statement of Anand Mahindra, Vice Chairman And MD, Mahindra & Mahindra)
  • The impact of the US downgrade, from AAA rating to AA+, on business is not yet known. It is too early to gauge the impact. If there is a double-dip, it is really bad news for the industry. But companies and customers are better prepared these days so… the impact will not be as bad as the last recession. (Statement of Kris Gopalakrishan | CEO, Infosys Technologies)
  • The announcement is a formalization of what the numbers, which were already in public domain, were saying. In the short term, there could be some pain because of the impact on sentiment. But even if there were no downgrade, we feel the RBI should pause on rate hikes for India to maintain growth (Statement of Shikha Sharma | MD, Axis Bank)
  • As stated by S&P, the downgrade is more a reflection of the political situation in the United States rather than the economic fundamentals. Given that Fitch and Moody’s have retained sovereign ratings, it may be too early to remark on the immediate impact on business and investor confidence
    (Statement of T K Kurien | CEO, Wipro)
  • In the short term, it could result in a fear psychosis that may lead FIIs to withdraw from the US market, triggering panic selling in India. We will have to see how the commodity and other markets react. A lot also depends on how the recovery takes place in the US. (Statement of Harsh Mariwala | CMD, Marico)