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Can you please explain this part?
Indian banking seems fine to me. Venezuela, Poland and Turkey all have more troubled loans than India and are the next to go besides the PIIGS.
India export numbers have an Enron quality to them. The UAE is a top trading partner and export market for India. The UAE isn't exactly booming anymore, yet the trade numbers haven't declined. I know the UAE is a re-export point for India, but still suspicious.
India runs a huge trade deficit every year. It covers for it with remittances from Indians overseas. This is the true economic story here in my opinion. More and more Indians leave India every year (something like 10 million a year), so this is the real economic driver.