Certainly, we have seen the effect of this demand on most commodity prices. Of course, one price increase that we all feel acutely is that of oil. The recent surge in crude oil prices is another example of pressure stemming, at least in part, from strong world demand.
What could be the possible impact of less than orderly adjustment of global imbalances on the Indian economy? India does not depend on the international capital market for financing the fiscal deficit and consequently to some extent adverse consequences of the global developments would be muted.