Leather and textiles among worst hit
The global financial turmoil has led to a decline in India’s factory output for the third time in five months in February. Reports indicate that industrial output growth has slowed considerably and, in October 2008, factory output contracted for the first time in 13 years.
Despite this, analysts believe there may be a light at the end of the tunnel. The Reserve Bank could still cut interest rates and inflation is no longer considered a problem.
However, it seems the leather sector is among those hardest hit by the downturn. "Sectors showing poor performance are those having export linkages like textiles and leather," economic affairs secretary, Ashok Chawla told Reuters. Despite this, Mr Chawla added that domestic demand continues to be strong.
