New Delhi, March 17: Finance Minister P Chidambaram said today that the fallout of the US subprime crisis on the global credit and housing markets would impact India. “When crisis (has) moved from the subprime mortgage market to the housing market, and now the housing market to the credit market, there is an impact on India. There is an impact in terms of credit flows and financial flows. But at the moment, I believe that the impact is second-order impact and a moderate impact,” he said.

Turmoil in the global financial currency markets has started affecting Indian companies and the stock market. While ICICI Bank has lost as much as $264 million until January due to its exposure to the overseas credit derivatives markets, other banks too are facing significant losses. Analysts note that the total mark-to-market losses of corporate India’s exposure to the foreign exchange derivatives market may be in the region of $5 billion.

Chidambaram said that the Indian stock markets are taking cues from the US and Asian markets, even though the subprime mortgage crisis has only moderately impacted credit and financial flows into the country. “In fact, we now have to track what is happening in Asian markets. Hong Kong, Tokyo and Shanghai open before the Indian market opens. If you watch closely, you will find that what is happening in Asian markets is impacting the Indian stock market,” he said.

Chidambaram added that the government would make efforts to achieve economic growth of well above 8 per cent and close to 9 per cent in fiscal 2008-09. “We have delivered high growth... we will make every effort to maintain the growth rate at well over 8 per cent and close to 9 per cent (in 2008-09),” he said while replying to the debate on the Budget in the Rajya Sabha. The Indian economy has moved on to a higher growth plane, he opined.

The average growth rate during the four years of the UPA government was 8.7 per cent, the minister said, adding that the 11th Five-Year Plan has set a average growth rate target of 9 per cent and a 10 per cent target for the terminal year (2011-12). “Growth is imperative. Growth is important. If there is growth, there is chance of inclusive growth. Without growth, there is no chance of inclusive growth,” he concluded.