'All is not well in Indian industry'

New Delhi, Oct 23 : The Indian industry is not totally insulated from the global financial crisis, which will have serious implications on the national economy, say industry leaders.

'Things are tough in the industry as a consequence of US recession, which has now slowly started impacting the Indian economy as well,' MakeMyTrip founder and chief executive Deep Kalra said here Thursday.

He was speaking at the TiEcon Delhi-2008, an annual conference of industry leaders, organised by non-profit global network The Indus Entrepreneurs.

Maruti's former managing director Jagdish Khattar said every sector, including automobile, has been hit badly by rising input costs.

He, however, added that the economic downturn has its positive effects also, as it threw up 'a plethora of opportunities to prepare ourselves'.

Most of the industry leaders present at the conference said the profit margins of Indian companies were getting affected due to the global financial woes, but the firms still retain double digit growth.

'The food prices have gone up phenomenally, but we rationalised our business to insulate our company (from the crisis) by exiting business which are not profitable,' Yo! China managing director Ashish Kapur said.

According to Delhi University economist Ram Khanna, only those companies, which are dealing with the world market, are affected by the recession.

'The impact is mainly on those companies which are either internationally exposed for raw materials (steel, oil) or whose revenue is in dollars,' Khanna told IANS.

'It is still not confirmed whether the US was going through recession or not, and this can be done only when the third quarter results are out which will display if the earnings are still in negative,' he added.

Moreover, with the government paying arrears to its employees, the purchasing power has increased in the domestic market. This should fuel demand and give an impetus to growth.

Khanna expressed confidence that the market conditions will improve by December or maximum by the general elections next year.