India especially vulnerable to global slowdown: Experts

With Indian stocks dropping to a 2-year low on Thursday, analysts say the country - which was relatively sheltered during the last financial crisis in 2008 - is looking especially vulnerable this time around.

The Bombay Stock Exchange Index is down more than 24% since the beginning of the year and the rupee has fallen 17% against the dollar during the same period, hitting an all-time low earlier this week. Renowned investor and China bull Jim Rogers told a CEO Power Session at the Asia Business Leaders Awards in Singapore, that he was short on Indian stocks. Rogers said the country would find it hard to grow, given a debt to GDP ratio of over 90%. India`s debt picture could get worse. Earlier this week, Montek Singh Ahluwalia, the head of India`s Planning Commission told CNBC-TV18, the budget deficit for the current financial year could be as high as 5.5% of GDP. He also said the economy was likely to grow just 7-7.5% in the fiscal year ending March 2012 - a far cry from the government`s original target of  9-9.5%. India is also facing a worsening current account deficit, which widened to USD 14.1 billion in the April to June quarter from USD 5.4 billion in the March quarter. Numbers for more recent quarters haven`t been released but they could show a deterioration given the debt crisis affecting Europe. Piyush Gupta, the CEO of Southeast Asia`s largest bank believes Asian economies are going to slow down by one to two percentage points over 24 months because of weakening exports. According to Gupta, even though exports make up around 30% of China`s GDP, compared to just 19% for India, China has more ammunition to weather the global economic slowdown than India over the short term. "China has the capacity to press the accelerator....it can spend half a trillion dollars...(to stimulate the economy), where as it is difficult for India to do that with a fiscal deficit of 10%," said Gupta, referring to the fiscal deficit of both the central government and all the states. He however, added that 10 years down the road, India could be in a better position than China because capital allocation and financial institutions work better in the country. In addition, he points out that domestic consumption makes up 67% of the economy, while in China it makes up 34%, giving India a greater cushion from a troubled global economy. Copyright 2011 cnbc.com