Will US Inflation push the Indian Economy to a bottleneck?

Will US Inflation push the Indian Economy to a bottleneck?

It’s hard to believe if someone says the US inflation has shot 9.1% from 8.6%, but what if the US Labor Department did? Yes, this is something real! The 3 main culprits behind this scene are - 

Corporate Pricing 

Companies that once thought low pricing was a strategy to get fatter margins, now harp on inflation to increase product/service prices.


Energy Prices 

All the goods or services we use is somewhere powered by energy. According to the American Farm Bureau, the fuel price shot from 100% to 300% and further increased due to Russia-Ukraine tensions. 

Global Supply Chain 

Labor shortage caused due to viral spread of the COVID pandemic has hobbled the global supply chain as there is a list of products and services that cannot pass to other countries unless it has reached the US.  

On the other, India will be affected in three ways. The difference in currency rates may make India a less attractive spot for trade. Secondly, low returns on the US debt market might pull down the spirit of investors in India, and thirdly due to heavy outflows from the Indian debt market, the currency market will get a major hit. However, with the CAD widening from $39 B to $105 B, the Indian rupee would not be under mild pressure.

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