Commerce and Industry Minister Kamal Nath asserted on Wednesday at the World Economic Forum's annual meeting that India would not be engulfed by the worsening global financial and credit crisis. He maintained that the country's growth path is based more on the domestic consumption and not on exports.

"Unlike China, which is relatively more dependent on exports for its growth, the growth in Indian economy is driven by the surging demand," Nath maintained. He also said India was not "coupled" with the happenings in the US and other economies.

"I don't see the impact of the financial crisis on India," the minister reiterated during a session on `Update 2008: Economics'.

He argued that "the dynamics of the recession" had changed, adding that the government was more concerned about the sudden spurt in the international prices of food articles.

As expected, the proceedings on the first day of the Davos 2008 were dominated by one issue - the fear of a recession in the US economy and how it would impact various countries.

Besides, the participants debated whether China and India would continue to grow at a brisk pace given the recessionary pressures on the US economy.

"The rest of the world is not as resilient as China and India and it is difficult to predict the repercussions of a severe recession in the US economy if its current consumption of $9.5 trillion slows down drastically," said Stephen Roach, Chairman of investment bank Morgan Stanley in Asia.

Roach suggested that it was wrong to say China and India can grow independently despite the recession in the US economy, adding the domestic consumption in China is about $1 trillion and $ 50 billion in India. He said if the consumption in the US economy shrinked by $3-4 trillion, China and India would be adversely impacted.

However, Nath differed, saying "economic activity has shifted to East Asian economies and what we are witnessing is growing South-South trade".

Both India's political and corporate elite are putting a brave face on the worsening economic situation in the industrialised countries, said several analysts at the WEF meeting.

Clearly, there is lack of consensus on whether China and India can be de-coupled from the happenings in the US economy.

However, Yu Yongding, Director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, said: "If there is a tremendous slowdown in the US economy, then we must be worried about it."

Nouriel Roubini, Chairman of New York-based Roubini Global Economics, said "if the US economy sneezes, the rest of the world catches a cold", adding this time the diagnosis in the US was worse.

Economists also remained divided over the role of central banks in bringing the world to the brink of recession and whether institutions like the Fed were equipped to steer the global economy out of danger.

John Snow, former US Treasury Secretary, said central banks had performed remarkably over the last two decades. "The issue of whether central banks are capable of vigorous action, bold action, was answered yesterday (referring to the cut by 75 basis points in the interest rate by the Fed on Tuesday)."