The answer to both these points is that India was hit by the crisis because we are more globally integrated than we tend to acknowledge. We were impacted through all channels – the financial channel, the real sector channel and the confidence channel. The impact of crisis on India was, however, relatively muted.
It would be cause for alarm, therefore, if we remain complacent. We need to plan; we need to act pre-emptively to create buffers that will protect us from the headwinds that will come our way.