The already weak industrial sector has gone into reverse gear, with production falling in one sector after another. And now there are fears that the whole economy will fall into the grip of a slowdown. The signs are all there. Yet, the one thing that the economy needs to stay afloat is missing, consumers. It is clear that India is passing through a phase of economic recession.

Many other industries are also affected. I guess two out of five industries are closed or are on the verge of closing. According to a survey of business confidence by the Confederation of Indian Industry (CII), at least one-third of industrial sectors are set to report a sharp dip in their fortunes during the past six months. About a third says production and sales are down compared to the same period last year. The once booming automobile, consumer electronics and consumer durable sectors are the hardest hit, while industries like aluminum and steel are in a precarious situation. Indian software and services industry currently accounts for almost 2% of the country's gross domestic product. The impact of this gradual but painful economic slowdown is now being felt at the most personal level, as urban Indians lose their jobs and recruitment dries up. Every sector has been affected, from banking to steelmaking, with millions facing voluntary retirement schemes. And fewer new recruits are needed, even in fast-growing industries."Due to the slowdown, software recruitment has been affected by found 30% to 50%", said Dr. Raj Sharma, Director of the Cistems Institute of Information Technology. The demand for software professionals has dropped considerably, and we are not getting any fresh inquiries from software companies. Predictions that India's economy would grow by 6% this year now seems highly unlikely, and some experts are predicting that growth will be below last year's 5.2% - a blow to the government's plans for economic expansion.

Indian stocks crashed to an eight-year low amid fears of an imminent US strike on Afghanistan and continuing uncertainty about the global economy. There was a partial recovery towards the close as high net-worth individuals and some domestic institutions stepped in to make modest purchases. The worst hit were stocks of technology companies which have significant exposure in the US markets. Foreign institutional investors, who had pumped more than $2bn into India this year, also began to sell heavily in the face of increasingly dangerous developments in the region.

Analysts say recent developments could not have come at a worse time for the Indian economy, which was already suffering new lows in industrial and agriculture production. In the short term, they say the Indian capital markets will take their cue from the US markets which reopened on Monday after a four-day closure.