Impact of Global Meltdown on GDP, Growth and Foreign Trade of Indian Economy

Abstract

In the era of globalization financial crisis seems to have been occurring with greater frequency. The global financial crisis of 2008-2009 emerged in September 2008 with failure of several large United States based financial firms and stock market prices around the globe. But the financial crisis really started to show its effects in the middle of 2007 and into 2008. Around the world the stock markets have fallen. Large financial institutions have collapsed and also wealthiest nations have come under this wave of recession. Indian economy is also one of the victims of this great meltdown. With which our GDP and exports showing decreasing trend and many industries are bankrupted. An attempt was made to study the impact of meltdown on GDP growth and trade of India. Simple regression was used to find out the dependence of GDP on exports in India. The result shows India’s GDP and balance of trade showed decreasing trend during the period of global meltdown in 2007-08. Some analysts say that this is the first crisis in the modern financial markets where new products created by debt and asset securitization are traded globally.