India’s growth trajectory after the credit crisis of 2008-09 has been impressive so far and second only to China among the major economies. In a world facing an uncertain recovery, the economy grew by 8.67% in the first three quarters of the current fiscal. The resilience of the domestic economy, evident in the record-breaking car sale numbers and accelerated credit growth, helped Indian equity markets attract record foreign inflows of $29 billion in 2010.
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However, high inflation, rising crude oil prices and a slowdown in capital expenditure have clouded the outlook and led to a $1.23 billion net outflow of capital between January and March.