Now a days, we are listening in news constantly that US is undergoing a recession, what actually is a recession? well when the GDP growth is negative for two consecutive quarters, it is said to be in a recession. also we here the word 'Depression' what is Depression? A depression is a severe downturn that remains for several years.

we can say that currently US is in recession. This would have a impact on india as well. In Indian Economy there is a trade deficit that is import of goods is greater than the export of goods. This trade deficit is balanced by th revenues from the service sectors mainly software and IT companies and also from foreign investment.

Now what is happening is that Oil Prices are going upand india being a importer has to spend more on imports resulting in widening of trade deficit. This has led to increased pressure on service sector to balance this trade deficits. Now due to recession, many major financial firms that were using the Indian software has been closed and that has resulted in decline of revenues.

Also, the country that is facing recession has less purchasing power and therefore export to that country also declines.