"The recent development in the euro zone has heightened uncertainty in financial markets. India's short-term growth prospects have been adversely impacted," he said while inaugurating the India International Trade Fair here.
The minister further said the tendency of certain developed countries to adopt protectionist measures during a downturn would have a bearing on India's exports, which have reported impressive growth so far this year.
"India's export sector has performed well this year. I must add that the tendency of some developed countries to resort to protectionist measures in the face of downturn of their economy is a matter of grave concern, not only to our exports, but also to the recovery of the world as a whole," he said.
"If the euro zone crisis prolongs, growth in exports will be impacted," he added.
Industrial production slipped to a two-year low of 1.9% in September. Overall economic growth in the first quarter of the fiscal stood at 7.7%, the lowest rate experienced in 18 months.
The Reserve Bank has already revised its growth projection for 2011-12 downward to 7.6% from 8.5% in the previous fiscal, mainly on account of the global economic slowdown and stubborn domestic inflation.