Any slowdown in the US hits Indian IT badly60% of Indias exports of IT/ITES are to the US. And around 60% of the companies operating in the IT/ITES sector have been working for American financial corporations like Goldman Sachs, Washington Mutual, Citigroup, Bank of America, Morgan Stanley and Lehman Brothers. Indian software and outsourcing firms earn roughly half their revenue from the US. Nasscom has already lowered the growth rate target from 30% to 21-24% for this year. Other than IT, one can expect an adverse impact on the gems and jewellery segment. The recent slowdown has already robbed the Surat diamond industry off its glitterthere has already been an estimated 15% to 20% fall in demand for diamonds. The US is the largest market for diamonds, gemstones and jewellery, constituting 40% of the total gems and jewellery exports from India last year. Overall merchandise exports to the US are likely to take a hit as well. India exports more than 10% of its total merchandise exports to the US alone. Although growth in merchandise exports was positive at 6.37% between April-May 2007 and April-May 2008, it is now likely to slow down. Still, one must keep in mind that exports account for only around 13% of Indias GDP, of which exports to the US are a fraction. The US is also the largest foreign investor in India, if one excludes Mauritiuss large investments which are mostly investments from the US and elsewhere routed through the tiny island nation. Now investments in key sectors including telecom, food processing, electronics and financial services that form the core recepient sector of US FDI are likely to slowdown. Of course, India is still a large domestic market and if the monetary policy orthodoxy is abandoned, the economy can grow well. Expect the US slowdown to impact but not determine the course of Indias growth.