Impact of Fed hike on India should be minimal: Arvind Subramanian

India is more insulated to Fed-related volatility than other emerging markets due to its better economic fundamentals

The impact of the US interest rate hike should be minimal in India as the country is relatively well cushioned, chief economic adviser Arvind Subramanian said on Thursday.

Policy makers, including Reserve Bank of India Governor Raghuram Rajan, have been touting India as being more insulated to Fed-related volatility than other emerging markets due to its better economic fundamentals.

"I think we are relatively well cushioned. Volatility in Indian markets should be quite minimal," Subramanian told reporters.

The Fed hiked interest rates for the first time in nearly a decade on Wednesday, signaling faith that the US economy had largely overcome the wounds of the 2007-2009 financial crisis.

Image: Arvind Subramanian, chief economic adviser. Photograph: Adnan Abidi/Reuters