Indian officials are shrugging off fears that a potential slowdown in the United States will put the brakes on the country's runaway economic growth. But as Anjana Pasricha reports, businessmen and investors are not so sure that India will remain unscathed if there is a downturn in Western economies.

As worries about a possible slowdown in the United States economy spread across the globe, Indian officials tried to calm fears that the country's strong growth will be hurt.

Finance Minister P. Chidambaram struck a reassuring note. "Fundamentals are very sound; there is no reason at all to allow the worries of the Western world to overwhelm us." he said.

Indian officials say the country's economy is not as dependent on exports as that of China or other East Asian economies, and is driven by strong domestic consumption. They say the near nine per cent growth in recent t years will dip only marginally if there is a slowdown in the United States.

However, several economists say India cannot remain isolated from problems in the world's largest economy.

Rajiv Kumar is the director of International Council on International Relations in New Delhi. He says India is now more closely linked with global markets than it was in the 1990s. "If you add up exports, imports of goods and services, merchandise, trade, today they constitute more than 50 per cent of India's GDP. It was less than 20 per cent in 1990. There has been a sea change. We are much more now related to the external world than we were earlier. Just as a rising tide lifts all the boats, a waning tide takes the boats along with it to a lower level," he said.

Worries are growing in export industries because the United States and Europe are India's largest trading partners. For example, most customers of India's information technology industry are American companies, and if their profits fall, the flourishing local software companies could suffer.

There are already signs that tough times lie ahead for information technology companies. One of India's largest software exporters, TCS, says it will slash its staff bonuses because profits have been lower than expected due to a weakening dollar.

And there are concerns that foreign investment into the country could decline if there is a slowdown.

Volatile stock markets are already reflecting the nervousness. Mumbai's main SENSEX stock index has sunk about 16 percent in the past month.