If US economy tanks, dollar will depreciate. $1 could be below 30 rupees. This will hit the IT/ITES sector which has been the reason for recent India growth story. IT/ITES sector could layoff employees and/or cut salaries. This will in turn reduce consumer spending including real estate coming down. Lot of folks who bought houses at high price could get hit because their salary is reduced. The whole thing could have a spiral effect. Ofcourse there will a small section of people who will benefit from the real estate price reduction provided they weather the salary reduction storm. Let us hope this doesn't happen and some good innovation spurs our economy.
